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

Define Accrued liabilities , Obligations showing the responsibility to pay ...

Obligations showing the responsibility to pay for solutions or products that have been suffered or obtained but not compensated for by the end of the sales interval.

Volume, I have a box that measures 3m x 3m x 3m. What is the volume of the...

I have a box that measures 3m x 3m x 3m. What is the volume of the cube?

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

What is the complete answer and files for this document

Probability, Consider the two events A and B with P(A) = 0.4 and P(B) = 0.3...

Consider the two events A and B with P(A) = 0.4 and P(B) = 0.3. (a) If A and B are independent then compute the probability that Both A and B happen

Revenue Recognition & Depreciation, Question 2 Pankratov Lakes is a new rec...

Question 2 Pankratov Lakes is a new recreational real estate development that consist of 500 Lake front and lake view lots. As a special incentive to the first 100 buyers of lake v

examine the distributions of the sample data, A second file on DocDepot na...

A second file on DocDepot named Marks.mtp contains the final exam percentages of students in ADM2304A in the Fall 2011 semester. Assume that the class can be considered a random sa

Assignment , assume that your group is incorporating a business organizatio...

assume that your group is incorporating a business organization. you are required to present a detailed structure, business environment and organizational structure of the entity.

Acc, Project I The trial balance of the Parton Wholesale Company contain...

Project I The trial balance of the Parton Wholesale Company contained the following accounts at December 31, 2010 the end of the company’s calendar year. PARTON WHOLESALE COMPA

Question, In a survey of 284 smokers, 197 smokers reported that they wanted...

In a survey of 284 smokers, 197 smokers reported that they wanted to quit smoking. Compute a 90% confidence interval for the true proportion of smokers that want to quit smoking.

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