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 statistics, what is the role of statistics in other sciences?

what is the role of statistics in other sciences?

Define accounting Actuarial basis , A basis used in processing the quantity...

A basis used in processing the quantity of advantages to be created regularly to a finance or consideration so that the complete advantages plus the complicated income thereon will

Index number, Characteristics of index number

Characteristics of index number

Poisson distribution, uuuuioooooo zAZ az; z;;ZuazA; Zazx A Za zA ZA xza XZ ...

uuuuioooooo zAZ az; z;;ZuazA; Zazx A Za zA ZA xza XZ Axz AZX A xA XZ axz AZX A zxA ZXa oxz aOX AxzAAX axz

Probability, Draw a tree diagram to represent all probabilities for the fol...

Draw a tree diagram to represent all probabilities for the following. a bag contains 11 red and 8 blue marbles. Two marbles are selected at random without replacement from the bag.

Statement, prof. ya-lu-chan definitions statistices

prof. ya-lu-chan definitions statistices

To find first quartile, how to find 1st quartile from the graph of more tha...

how to find 1st quartile from the graph of more than ogive type, please reply me with an example

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