A bond with 4% coupon rate

Assignment Help Finance Basics

Reference no: EM13308739

1. A bond with 4% coupon rate (paid annually), 10 years to maturity, and $1000 face value.

2. A bond with 4$ plus current (short) rate (paid annually), 10 years to maturity, and $1000 face value.

3. a bond with 8% minus current (short) rate (paid annually), 10 years to maturity, and $1000 face value.

The prices of the bonds are $700, 800, and 900 respectively.

a) Derive the price of a zero coupon with 10 years to maturity and 1000 face value

b) Derive the price of a floating rate bond (coupon paid annually) with 10 years to maturity and 1000 face value

Reference no: EM13308739

Questions Cloud

Theory y manager : Jaclyn is a manager who keeps a tight rein on her staff since she thinks they would not work without supervision. She doubts their commitment to the company and even to their own development. She is a Theory Y manager.

Heavy concentration in mortgages : Savings institutions are exposed to credit risk as a result of their heavy concentration in mortgages, mortgage-backed securities, and other securities. They attempt to diversify their investments to reduce credit risk. Savings institutions ar..

How much do you need to put away each month : 13. You want to retire as a millionaire. How much do you need to put away each month if:

What is the equivalent present value of the prize : At the reading of the will, you learn that your inheritance will allow you to receive the amount of $5600 at the end of each year for a total of 19 consecutive years. However, because of your young age, these amounts will not begin until the en..

A bond with 4% coupon rate : 1. A bond with 4% coupon rate (paid annually), 10 years to maturity, and $1000 face value.

Events just described reflect any behavioral biases : Discuss whether the events just described reflect any behavioral biases.

Multi-period fixed income capital budgeting : Multi-Period Fixed Income Capital Budgeting

The operating power of a high-end desk top system : You have just been hired by Hewlett Packard (HP) in its capital budgeting division. Your first assignment is to determine the net cash flows and NPV of a proposed new type of portable computer similar in size to an iPhone, but which has the op..

What will be your annual return on $100 invested in fund : What will be your annual return on $100 invested in her fund if she allows you to reinvest in her fund the 1% you earn each day?

User Account

All Pages