Question: You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i=16.5% compounded once per

You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i=16.5% compounded once per year. 25 years later it will be a 5 year zero coupon bond. Suppose the interest rate on this bond will be 16.5%, what will the price of this bond be in 25 years?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

1.8 If you make a straight-line projection from Fig. 1.3, what will be the minimum feature size in integrated circuits in the year 2020? The curve can be described by F = 8.214 x 10-0.06079(Y-1970)...

8.You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of = 6% compounded once per year. A few minutes later the annual yield rises to = 7% compounded once per...

1. You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of 4% compounded once per year. A few minutes later the annual yield rises to 5% compounded once per...

19. You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i=16.5% compounded once per year. 25 years later it will be a 5 year zero coupon bond. Suppose the...

You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i = 6% compounded once per year. A few minutes later the annual yield rises to i = 7% compounded once per...

9. You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i 14% compounded once per year, 25 years later it will be a 5 year zero coupon bond. Suppose the...

You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i = 4% compounded once per year. 25 years later it will be a 5 year zero coupon bond. Suppose the inters...

9. You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual discount rate of 1 = 14% compounded once per year. What will be the price of this bond 25 years later? Suppose...

You buy a 30 year zero coupon bond which will pay you $1,000 in 30 years at an annual yield of 15.0% compounded annually. 25 years later it will be a 5 year zero coupon bond. Suppose the interest...

18. You buy a 30 year zero coupon bond which will pay you $10,000 in 30 years at an annual yield of i=1% compounded once per year. A few minutes later the annual yield rises to i=2% compounded once...

5. Suppose you save $19,000 per year in an ordinary annuity promising you an interest rate of i = 7.625% compounded once per year. How much will you have after 35 years? 8. You buy a 30 year zero...

Corporation Z completely liquidated in October of the current year, at which time Z made a liquidating distribution to its shareholders. The property distributed was subject to a liability of $40,000...

The population is P(t) = 2.0 x 106 + 2.0 x 104t, and the mass per person W(t) is W(t) = 80 - 0.005t2. The total mass of a population (in kg) as a function of the time, t, is the product of the number...

Select all that apply All else equal, an individual's wealth will increase if they: have capital gains sove have capital losses

A company is preparing completing their Cash Budget. The following data has been prepared for cash receipts and payments. January February March Cash receipts $1,061,200 $1,182,400 $1,091,700 Cash...