Compute the value of an eight-year zero-coupon bond

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Problem 1. Compute the value of a 5-year 7.4% coupon bond with a par value of $100 that pays interest annually if the appropriate discount rate is 5.6%. What would be the value of the bond if the interest is paid semiannually?

Problem 2. Compute the value of an 8-year zero-coupon bond with maturity value of $120 discounted at an 8% interest rate. The rationale is that the pricing of a zero-coupon bond should be consistent with the pricing of a semiannual coupon bond. What would be the value of this bond if the discounted interest rate has dropped to 6.5%?

Problem 3. What is the value of a zero-coupon bond paying semiannually that matures in 2

Reference no: EM132630890

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