What will be the price of these bonds

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1. Northrop Real Estate Company management is planning to fund a development project by issuing 10-year zero coupon bonds with a face value of $1,000. Assuming semiannual compounding, what will be the price of these bonds if the appropriate discount rate is 11.00 percent? (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25.)

2. Josh Kavern bought 10-year, 10.0 percent coupon bonds issued by the U.S. Treasury three years ago at $900.00. If he sells these bonds, for which he paid the face value of $1,000, at the current price of $800.00, what is his realized yield on the bonds? Assume similar coupon paying bonds make annual coupon payments. (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.

Reference no: EM131905078

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