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

#titlelinear regression.., regression line drawn asY=C+1075x,when x was 2,a...

regression line drawn asY=C+1075x,when x was 2,and y was239,given that y intercept was11.calculate the residual.

Accounting for partnerships and limited liability companies, Tim Snyder and...

Tim Snyder and Jay Wise have decided to form a partnership. They have agreed that Snyder is to invest 30000 and Wise is to invest 40000. Snyder is to devote full time to the busi

Radioactive Disintegration Laws, Soddy and Rutherford, from their experimen...

Soddy and Rutherford, from their experimental study regarding the radioactive disintegration formulated the following laws, known as laws of radioactive disintegration. 1. Radioac

6.2, comulativefrequencydistribution

comulativefrequencydistribution

Anova 1 and 2 way, ANOVA 1 and 2 way, t and f-tests 1,2 or more means... st...

ANOVA 1 and 2 way, t and f-tests 1,2 or more means... standard deviations known/unknown. I have a project where I must use these tests, but I''m not clear on the when and how.

Amortized cost , Amortized cost The par value of its decision enhanced or ...

Amortized cost The par value of its decision enhanced or lowered by any unamortized top quality or lower price.

In-depth analysis of the effects of the salary, Background: There was no 2...

Background: There was no 2004-05 National Hockey Leagues (NHL) season because of a labour dispute between the players and the teams. One of the outcomes of the labour dispute was

Plural sense, explain all the nature of statistics

explain all the nature of statistics

What is the margin of error, The National Quality Research Center at the Un...

The National Quality Research Center at the University of Michigan provides a quarterly measure of consumer opinions about products and services (The Wall Street Journal, February

Regression analysis, Data was gathered on a group of ninth grade students. ...

Data was gathered on a group of ninth grade students. Some students have been diagnosed with a learning disability.  All students were measured on conduct, attention, hyperactivity

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