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Fair price for one of? cyberdyne zero coupon? bonds

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1. Cyberdyne Systems is issuing a series of zero coupon bonds to raise? $500M to fund research and development at its Skynet division. Each bond will have a face value of ?$1,000 and will mature in 30 years.

The yield on the bond is 8.5?%. What is the fair price for one of? Cyberdyne's zero coupon? bonds?

The fair price for one of? Cyberdyne's zero-coupon bonds is? ?(Round to the nearest? cent.)

2. Beam Inc. bonds are trading today for a price of ?$1,524.38. The bond currently has 15 years until maturity and has a yield to maturity of 3.46?%. The bond pays annual coupons and the next coupon is due in one year. What is the coupon rate of the? bond?

The coupon rate of the bond is ? (Round to one decimal? place.)

3. Beam Inc. bonds are trading today for a price of ?$807.81. The bond pays annual coupons with a coupon rate of 4?% and the next coupon is due in one year. The bond has a yield to maturity of 8.18?%. How many years are there until the bond? matures?

The number of years until the bond matures ? years. ?(Round to the nearest whole? number.)

4. What is the percentage change in price for a zero coupon bond if the yield changes from 9?% to 5.5?%? The bond has a face value of ?$1,000 and it matures in 11 years. Use the price determined from the first? yield, 9?%, as the base in the percentage calculation.

The percentage change in the bond price if the yield changes from 9?% to 5.5?% is ? ?(Round to two decimal? places.)

5. Suppose you purchase a zero coupon bond with a face value of ?$1,000?, maturing in 18 ?years, for ?$212.30. Zero coupon bonds pay the investor the face value on the maturity date. What is the implicit interest in the first year of the? bond's life?

The implicit interest in the first year of the? bond's life is ? ?(Round to the nearest? cent.)

Reference no: EM132799740

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