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

The data analysis process and statistical techniques, I need to conduct an...

I need to conduct an analysis' on an alcohol and substance abuse study. the data set is too large to upload . The data set is the SPSS version that I need to work from. Here is the

Hypothesis the basic short-run and long-run, In reguards to the airlines in...

In reguards to the airlines indusry, provide a minimum of 300 words for each statement. plus atleast 3 academic resources. 1. hypothesis the basic short-run and long-run behavio

TRENDS , Why do we particularly omit the middle year when using the semi-av...

Why do we particularly omit the middle year when using the semi-average method to fit a trend line

Mathematical theory in otc, All parts should be answered as briefly as poss...

All parts should be answered as briefly as possible (quality not quantity!). A few sentences will suffice. Just get your opinions across succinctly. Unnecessarily long answers will

Time series, what are the characteristics

what are the characteristics

Determine the variance, A gambling machines works in the following way. The...

A gambling machines works in the following way. The player inserts a penny into 1 of 5 slots which are colored Blue, Red, Orange, Yellow & Green corresponding to 5 colored light bu

Index number, How to solve problems of index number fixed based method

How to solve problems of index number fixed based method

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