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

Good measure of central tendency, What are the characteristics of a good me...

What are the characteristics of a good measure of central tendency

Determine the coefficient of determination, 1. A researcher was interested ...

1. A researcher was interested lowering the high school dropout level in his county. He measured the reading level of students entering middle school (based on a standard test) and

Define wages, Define Wages Income is often associated with production wo...

Define Wages Income is often associated with production workers (sometimes referred to as "blue-collar" workers), non-managers, and other workers whose pay is reliant on time wo

Agency funds, Agency funds,define it Organization money is used to account ...

Agency funds,define it Organization money is used to account for the resources presented by the state as an agent for individuals, private companies, and other health systems. Orga

State the model and apply t-test, Studies have linked brain size in infants...

Studies have linked brain size in infants and toddlers to a number of future ailments, including autism. One study looked at the brain sizes of 30 autistic boys and 12 nonautistic

Calculate permanent income, Suppose that permanent income, YP (t) is calcu...

Suppose that permanent income, YP (t) is calculated as the average of disposable income (YD t ) over the past 5 years, that is: YP (t) = 0.2(YD t + YD t-1 + YD t-2 + YD t-3

Journalizing confusing transaction, How would you journalize this transacti...

How would you journalize this transaction? Purchased used truck for $6,240, paying $3,120 cash and the balance on account.

Perform nonlinear regression analysis of a set - polynomial, This assignmen...

This assignment is designed to compare performance between Matlab and Excel for performing nonlinear regression analysis of a set of data. There are two data sets in the accompanyi

Computing observed probability values , For an alignment shown below derive...

For an alignment shown below derive log-odds score for the column 1 only by a)  Computing observed probability values b)  Expected probability values TAGCTT AAGCTC T

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