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Exam (elaborations)

Homework__4E__zero_coupon_bond

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Homework__4E__zero_coupon_bond

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Homework #4E (zero-coupon bond)

Marco Chip, Inc. just issued zero-coupon bonds with a par value of $1,000. The bond has a
maturity of 16 years and a yield to maturity of 11.70 percent, compounded semi-annually. What
is the current price of the bond? Round the answer to two decimal places.

Answer:

=PV(11.7%/2,16*2,0,1000,0)162.14

Question point Black Water Corp. just issued zero-coupon bonds with a par value of $1,000.
The bond has a maturity of 28 years and a yield to maturity of 11.39 percent, compounded
annually. What is the current price of the bond? Round the answer to two decimal places.

Answer:

=PV(11.39%,28,0,1000,0)48.79




point
Marco Chip, Inc. just issued zero-coupon bonds with a par
value of $1,000. The bond has a maturity of 9 years and a
yield to maturity of 9.74 percent, compounded semi-annually.
What is the current price of the bond?
Round the answer to two decimal places.
Answer:
424.89
Question
2 point
Black Water Corp. just issued zero-coupon bonds with a par
value of $1,000. The bond has a maturity of 23 years and a
yield to maturity of 12.46 percent, compounded annually.
What is the current price of the bond?
Round the answer to two decimal places.
Answer:


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