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

Components of time series, What are the components of time series? Bring ou...

What are the components of time series? Bring out the significance of moving average in analysing a time series and point out its limitations

Probability, A bag contain 5 white , 7 red and 8 black balls. If four balls...

A bag contain 5 white , 7 red and 8 black balls. If four balls are drawn one by one without replacement, find the probability of getting all white balls.

Statistics is the backbone of decision-making, 1. (a) 'Statistics is the ba...

1. (a) 'Statistics is the backbone of decision-making'. Describe.     (b) 'Statistics is as good as the user'. Describe. 2.  Differentiate between the following with example.

Calculates the value of variance and standard deviation, You are a psycholo...

You are a psychologist who has collected the subjective well-being scores of a number of elderly people aged 90 or above who are residents of an independent living facility or who

Price level change, how effect changes in prices to a financial statement?

how effect changes in prices to a financial statement?

Corporate B onds/Preffered Stocks, What is the complete answer and files fo...

What is the complete answer and files for this document

Decision tree, how do I answer: with the aid of a decision tree prepare a q...

how do I answer: with the aid of a decision tree prepare a quantitative report advising the company on the optimal course of action. (use a time horizon of 6years and ignore the ti

Bill of exchange, Who can issue a bill of exchange for what purpose? Onl...

Who can issue a bill of exchange for what purpose? Only a supplier who has to get the cash from his client for the purchase which was done on credit score platform can increase

Marketing research field surveys, In marketing research field surveys ar...

In marketing research field surveys are commonly used to collect primary data from the respondents. 1. Through Personal Interviews: The investigator follows a rigid proced

Correlation analysis and coefficient, Individual Music scores Mathematics s...

Individual Music scores Mathematics scores Angela 2 8 Arthur 6 3 Peter 4 9 Mike 5 7 Barbara 7 2 Jane 7 3 Jean 2 9 Ruth 3 8 Alan 5 6 Theresa 4 7 Assess the data using a Correlation

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