18.Bond valuation. If a $1,000 zero coupon bond with a 10year maturity has a market price of $385.50, what is its rate of return?

19.Bond valuation. A taxexempt bond was recently issued at an annual 6 percent coupon rate and matures 15 years from today. The par value of the bond is $1,000.

2. If required market rates are 6 percent, what is the market price of the bond?
4. If required market rates fall to 3 percent and maturity is 15 years, what is the market price of the bond?
6. If required market rates rise to 9 percent and maturity is 15 years, what is the market price of the bond?
8. At what required market rate (6 percent, 3 percent, or 9 percent) does the above bond sell at a discount? At a premium?

Answer rating: 100% (QA)

18 Bond Valuation Zero Coupon Bond To find the rate of return Yield to Maturity YTM for a zerocoupon ... View the full answer