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

Royalty accounts, Ritu acquired a mine on lease from Richa for a period of ...

Ritu acquired a mine on lease from Richa for a period of 8 years at a royalty of ` 60 per tonne of coal produced subject to minimum rent of ` 1,00,000 for the first year, increasin

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

How to calculate mode?, Mode Mode, M is the value that has the largest ...

Mode Mode, M is the value that has the largest number of occurrence or frequency in a data set, for instance, given the following data:  11 15 16 12 15 19 17 15 we can se

statistic assignment, I have statistic assignment can do it at 2.30 H, bec...

I have statistic assignment can do it at 2.30 H, because I don''t have time

Define ACCOUNTING PERIOD , Any time period specific for which economical re...

Any time period specific for which economical reports are prepared. Talk about FISCAL PERIOD.

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

What is the complete answer and files for this document

Statistical quality control, If in a hall there are 18 persons then how man...

If in a hall there are 18 persons then how many handshakes are possible?

Time series, what are the importances of time series

what are the importances of time series

Calculating a confidence interval for the proportion, To study what fractio...

To study what fraction of houses for sale in Victoria has a finished basement, a researcher selected a random sample of 20 houses that were on the market. It was found that 11 of t

Financial accounting, During October, Alcorn Company had 81,250 of cash rec...

During October, Alcorn Company had 81,250 of cash receipts and 83,688.00 of cash disbursements. The October 31 cash balance was 14,060. Determine how much cash the company had at

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