What is the yield to maturity of zero coupon bond

Assignment Help Financial Management

Reference no: EM13731486

What is the yield to maturity (YTM) of a zero coupon bond with a face value of $1,000, current price of $730 and maturity of 7 years? Recall that the compounding interval is 6 months and the YTM, like all interest rates, is reported on an annualized basis.

Reference no: EM13731486

Questions Cloud

Margin account paid interest rate at the risk-free rate : Suppose a futures margin account pays interest but at a rate that is less than the risk-free rate. Consider a trader who buys the asset and sells futures to form a risk-free hedge. Would the trader believes the futures price should be lower or higher..

What does the face value of the bond have to be : Hard Spun Industries (HSI) has a project that it expects will produce a cash flow of $1.8 million in 13 years. To finance the project, the company needs to borrow $1.0 million today. The project will also produce intermediate cash flows of $100,000 p..

What is expected return–beta relationship in this economy : Suppose that there are two independent economic factors, F1 and F2. The risk-free rate is 9%, and all stocks have independent firm-specific components with a standard deviation of 49%. What is the expected return–beta relationship in this economy?

Pure discount government bond : A pure discount (or zero-coupon) government bond is issued today that promises to pay $10,000 in 5 years. If the current interest rate on similar bonds is 6%, what is the price of the bond? Recall that the compounding interval for bonds is 6 months.

What is the yield to maturity of zero coupon bond : What is the yield to maturity (YTM) of a zero coupon bond with a face value of $1,000, current price of $730 and maturity of 7 years? Recall that the compounding interval is 6 months and the YTM, like all interest rates, is reported on an annualized ..

Assignment on organizational analysis : Select an organization (be sure to have your instructor's approval by Week 3 before starting this assignment) in which you are familiar, if only as a regular patron.

Market requires a yield to maturity : Suppose Wolverine Steel Company wishes to issue a $100,000 bond with a maturity of 8 years to raise $80,294. The market requires a yield to maturity (YTM) of 9.0% for this company's borrowing/debt. How much coupon will the company have to pay every s..

Dollar gain and loss relative to the price of the bond : Three years ago, you invested in a zero coupon bond with a face value of $1,000 that had a YTM of 11.5% and 14 years left until maturity. Today, that bond has a YTM of 6.5%. Due to a financial emergency, you are forced to sell the bond. What is your ..

Develop a marketing plan for hospitality organization : Choose an existing hospitality organization in Lane County and develop a marketing plan for them based on their product-service mix, location, and target market. Be sure to define all of these in your plan

User Account

All Pages