Homework Question help Needed

User Generated

Ryyrel

Business Finance

Description

A zero coupon bond has a face value of $1,000 and matures in 4 years. Investors require a (n) 6.1% annual return on these bonds. What should be the selling price of the bond? (Round to the nearest cent)

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Thank you for the opportunity to help you with your question!

The price of a zero-coupon bond can be calculated by using the following formula:
 
P = M / (1+r)n = 1000/(1.061)^4 =  $ 789.11   (Answer)

Please find the solution enclosed here with .. In case of any doubt please feel free to ask… Do not forget to best my answer… If you are having some other problem please feel free to contact me for quick & quality services..


Anonymous
I use Studypool every time I need help studying, and it never disappoints.

Studypool
4.7
Indeed
4.5
Sitejabber
4.4

Similar Content

Related Tags