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

Mean - median and frequencies, Put the appropriate summary statistics, e.g....

Put the appropriate summary statistics, e.g. mean, median, frequencies, percentages, for the different variables into a table to make them concise. You can see examples of consise

3-month absolute deviation, For our class homework we prepared a 3-month fo...

For our class homework we prepared a 3-month forecast for sales (12 months with actual sales for each month). What or how do we figure the absolute deviation of the 3-month foreast

Calculate the average account balance, In June 2009, the average Australian...

In June 2009, the average Australian credit card account balance was $3,127, according to data extracted Assuming that these balances are approximately Normally distributed with a

Working capital, prepare an estimate of working capital requirements from t...

prepare an estimate of working capital requirements from the following information 1. project annual sales 1,00000/- 2. selling price Rs. 8/unit 3.percentage of net profit on sale

Adjustments, office supplies on hand at year-end amounted to $100

office supplies on hand at year-end amounted to $100

Probability, Mike sells on the average 15 newspapers per week (Monday – Fri...

Mike sells on the average 15 newspapers per week (Monday – Friday). Find the probability that 2.1 In a given week he will sell all the newspapers

Profit margin (return on sales), Hugh Snore Bedding, Inc. has assets of $40...

Hugh Snore Bedding, Inc. has assets of $400,000 and turns over its assets 1.5 times per year. Return on assets is 12%. What is its profit margin (return on sales)?

Standard deviation, the first four moments of a distribution about the mean...

the first four moments of a distribution about the mean are 0,16,-64 and 162.what is the standard deviation ?

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