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

Intermediate, The screening test for the hep-c virus works by detecting the...

The screening test for the hep-c virus works by detecting the presence of antibodies to the virus. However, some non-HCV proteins can trigger a false positive, at a probability of

Answer, Would like to know answer to gametes problem

Would like to know answer to gametes problem

Time series, discuss the nature and causes of the components of an economic...

discuss the nature and causes of the components of an economic time series?

Co-planer forces, the resultant of two perpandicular forces of magnitude p ...

the resultant of two perpandicular forces of magnitude p each will be

Financial instruments, how are financial instruments recognised in financia...

how are financial instruments recognised in financial reports in the past and present?

Quantitative Technic management, How has quantitative analysis changed the ...

How has quantitative analysis changed the current scenario in the management world today?

Cost accounting test, i need someon to help me do my cost accounting test

i need someon to help me do my cost accounting test

Probable, how do you interpret the correlation on the basis of probable err...

how do you interpret the correlation on the basis of probable error

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