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

Role of accountant, What are the roles of accountant, let me know the caree...

What are the roles of accountant, let me know the career opportunity in accounting subject?

Acct 1100, comprehensive problem 1 chapter4

comprehensive problem 1 chapter4

Calculate - mean, how to calculate mean, median and the range on the follow...

how to calculate mean, median and the range on the following data: 15 18 23 22 21 18 14 20 25 12

General linear regression model, find the variance of least square estimato...

find the variance of least square estimator beta hat for general linear regression model

Assignment, i want you to make my buisiness statistics assignment

i want you to make my buisiness statistics assignment

Chi squared, I am using chi squared statistic on a 10 point Likert scale. I...

I am using chi squared statistic on a 10 point Likert scale. I am then trying to analyses if there is any difference between two groups of respondents....male and female. How do Ic

Measure central tendency, 1. A researcher is comparing two middle school 7t...

1. A researcher is comparing two middle school 7th grade classes. One class at one school has participated in an arts program (involving putting on a musical play) which emphasized

Adjusting entries, The notes receivable were accepted from several customer...

The notes receivable were accepted from several customers. The notes were issued on Sept. 1,2011 and will be settled together with a 20% interest on May 31, 2011.

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