Compute the price of a pure discount bond

Assignment Help Accounting Basics
Reference no: EM133019969

Question - Assume today is 01/01/98. Assume that the compounding frequency of all discount rates is quarterly. A risk free pure discount bond with face value $1,000 maturing on 12/31/98 is selling today at $940. The forward rate for the period 01/01/99 to 06/30/99 is 7%, and the forward rate for the period 06/30/99 to 12/31/99 is 7.5%. Compute the price of a pure discount bond maturing on 12/31/99, with $1,000 face value.

Reference no: EM133019969

Questions Cloud

Alignment between of business strategies : The lack of alignment between of Business strategies and HR strategies is a modern day corporate dilemma. As the HR manager of your organisation, explain what s
How much money with Midori have : Inflation is expected to be 5% per year over the next six years. How much money with Midori have, in real dollars, at the end of six years
America and the revolutionary leaders in france : What was the major difference between the revolutionary leaders in America and the revolutionary leaders in France?
Roles and responsibilities of international organisations : Explain the roles and responsibilities of international organisations (like uber) for harmonizing business practices globally.
Compute the price of a pure discount bond : Assume that the compounding frequency of all discount rates is quarterly. Compute the price of a pure discount bond maturing on 12/31/99 with $1,000 face value
What is the fair value of the option on December : The spot rate was $2.80 per 100 rupees and the option premium was $0.004 per 100 rupees. What is the fair value of the option on 1 December 20x1
How much is paid for the dividends : How much is paid for the dividends and how much retained earnings is reduced by dividends in the year 20X2
Calculate the amount of net income available : Calculate the amount of net income available for the company to pay dividends to current shareholders if it maintains a capital structure of 46% in debt funding
Why the internet makes market segmentation easier : Explain how and why the Internet makes market segmentation easier?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Calculate the amount of paid-in capital from treasury stock

The cost method is used to account for treasury stock. Calculate the amount of paid-in capital from treasury stock transactions resulting from the above events

  Determine the amount of factory overhead that under applied

During March, 4,750 hours were actually worked. Use this information to determine the amount of factory overhead that was (over) or under applied

  What is the value of a northern pacific bond

What is the value of a Northern Pacific bond with an 11 percent coupon, maturing in 15 years? Assume the market rate for this bond is 14 percent and that the interest is paid semiannually.

  Pro sports inc manufactures basketballs for the national

pro sports inc. manufactures basketballs for the national basketball association. for the 6 months of 2008 the company

  Determine percentage of total assets provided by creditors

O'Shea Enterprises started the 2002 accounting period with$30,000 of assets. Determine the percentage of total assets that were provided by creditors, investors, and earnings.

  How much of gas cost be assigned to the Lawn Department

Columbus Company provides the following ABC costing? information: How much of the gas cost will be assigned to the Lawn? Department

  What the management of bhp billiton have done to overcome

Effects of those wrong deeds on financial positions. Financial effects, effects on share prices, effects on other organizations and What the management of BHP Billiton have done to overcome

  What is her net tax due or refund for this year

Clarissa's gross tax liability is $1,300. She has a $1,900 nonrefundable tax credit, What is her net tax due or refund for this year

  What are some economic conditions that affect the cost

DellaTorre is very bright, and she would like to understand in general terms what will happen to her money. What are some economic conditions that affect cost

  Calculate the selling price of the job

Job WR53 at NW Fab, required €200 of direct materials and 10 direct labor hours at €15 per hour. Calculate the selling price of the job

  Calculate income from a business for tax purposes

Licences expense includes $460 for golf memberships for Jehangir and his spouse. Calculate income from a business for tax purposes

  Pass necessary journal entries for redemption of debentures

Paras Ltd. issued 40000, 11% debentures of 100 rupees each on 1st April 2015. Pass necessary journal entries for Redemption of Debentures

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd