A zero-coupon bond with a 6-year maturity and a face value of $1000 has a market value of $796. What is the bond's YTM?

 

A bond has a face value of $1000 with a maturity of 8 years. Its annual coupon payment is 3% of its face value. The YTM for bond is 5%. 

What is the market value of the bond? 

3)A bond has a face value of $1000 with a maturity of 2 years. Its annual coupon payment is 3% of its face value. The YTM for bond is 8%. 

What is the modified duration of this bond? 

4)A risky bond has a maturity of two years with a coupon rate of 5% to be paid annually and a face value of $1000. The YTM of the bond is 4%. 

What is the equivalent zero-coupon face value if this zero-coupon bond has the same maturity and YTM as the coupon paying bond? 

5)Suppose the face value of a firm's zero-coupon debt is $6 billion with a maturity of 2 years and YTM at 5%. The equivalent risk-free rate is 2%. Based on the Black-Scholes/Merton model.

What is the value of a put on the firm's assets with a strike at the face value of its debt ($6 billion)? 

Answer rating: 100% (QA)

1 To calculate the yield to maturity YTM of a zerocoupon bond we can use the formula YTM Face Value Market Value1 N 1 Given Face Value 1000 Market Val... View the full answer