Find out the present value, Basic Statistics

Assignment Help:

The present value (price) formula for a coupon bond is:

PV = C/(1+i) + C/(1+i)2 + ... + C/(1+i)n + F/(1+i)n

Part a

The present value (price) formula for a zero coupon bond is:

 PV = F/(1+i)n

Plugging in the given information,

 Price = $1000/(1+0.1)15 = $239.39

Thus the price of the fifteen-yr zero coupon bond is $239.39.

Part b

Semiannual coupon = 6%*$500/2 = $15

Plugging in the given information,

Price = $15/(1+(0.1/2)) + $15/(1+(0.1/2))2 +..... + $15/(1+(0.1/2)6 + $500/(1+(0.1/2)6 = $449.24

Thus the price of the three-yr semiannual 6% coupon bond is $449.24.


Related Discussions:- Find out the present value

MANOVA, 5. Perform a factorial MANOVA on the data. Before interpreting the ...

5. Perform a factorial MANOVA on the data. Before interpreting the multivariate results of the MANOVA, check outcomes that test other assumptions for this statistic: equality of co

.index number, what are the types of index numbers?

what are the types of index numbers?

Probability statistics, Probability 3DP, a Luxembourg-based company pla...

Probability 3DP, a Luxembourg-based company plans to develop and sell highly specialized 3D printers. The cost of product development is estimated at EUR 50,000.-, irrespective

Quantitative methods, which method is better for new product to gather the ...

which method is better for new product to gather the information they need,primary data or secondary data?

Index, Utility of index

Utility of index

Define vital statistics, Vital statistics may be interpreted in two ways-i...

Vital statistics may be interpreted in two ways-in a broader sense it refers to all types of population statistics by whatever mode collected while in a narrower sense it refers o

Find out the average and probability, Question 1:      (a)  The time it...

Question 1:      (a)  The time it takes to deliver a pizza after an order is placed is uniformly distributed between 20 and 50 minutes. What is the probability that a pizza wil

Indirect method, in my home work it is a balance sheet 12/31/2010 12/3...

in my home work it is a balance sheet 12/31/2010 12/31/2009 accounts recievable 8000 10000 below it has letter a b c d e f-k wanting the letter with the explaination a

Define BIENNIUM, Define BIENNIUM A 24-month fiscal era. In Washington, the...

Define BIENNIUM A 24-month fiscal era. In Washington, the biennium expands from July 1 of odd numbered years to June 30 of odd numbered or more years.

Write Your Message!

Captcha
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