A 8-year zero-coupon bond has an interest rate of 7.7%.  What is it worth today?

Q: Suppose you purchase a​ 10-year bond with 6.6% annual coupons. You hold the bond for four​ years,…

A: A bond is a kind of debt security issued by the government and private companies for raising funds…

Q: which of the following investments that pay will $5000 in 12 years have a higher price today?

A: Present Value: It is the present worth of the future amount and the present value is computed by…

Q: Consider a bond paying a coupon rate of 10% per year semi-annually when the market interest rate is…

A: Bond price will be Bond price =present value of all coupons +present value of face value…

Q: Suppose a bond is priced at $1108, has 18 years remaining until maturity, and has a 8% coupon, paid…

A: Coupons are paid on bonds periodically according to stated interest rate on the bonds and frequency…

Q: You are thinking about buying a savings bond. The bond costs $48 The bond will earn an annual rate…

A: Present Value = pv = $ 48Time = t = 12 YearsFuture Value = fv = $ 98

Q: uppose you considering buying a 10-year bond. This bond will pay ou 1603 taka every year for the ext…

A: Price of bond will be the present value of future cash flow from the bond and that would be the…

Q: 6. An initial sum of $50,000 is invested in a bond. You will receive payments of $2,000…

A: a. Semi - Annual Interest Rate: Given: Investment amount = $50,000 Semi-Annual Interest received =…

Q: Consider a fixed-payment security that pays P100 at the end of every year fo the three years. If the…

A: Present value of bond can be calculated by using this equation Present value =C1/(1+r) +C2/(1+r)2…

Q: A zera coupon bond with promised payment of $100 to be paid in 5 years has price equal to$80. What…

A: A bond refers to an instrument used by the issuing organization to raise debt capital from…

Q: Imagine that a $10,000 ten-year bond was issued at an interest rate of 6%. You are thinking about…

A: Using excel PV function to calculate the amount you will be willing to pay for this bond.

Q: Consider investing your savings in a coupon bond with the following properties: Maturity: 5 years…

A: Bond It is a financial instrument that pays a series of coupon payments at equal interval till the…

Q: Suppose a pure discount State of New York bond will pay $1,000 ten years from now. If the going…

A: A financial instrument that has a fixed income and also helps a company to raise funds for business…

Q: Suppose a Bangko Sentral ng Pilipinas bond will pay P500,000 twelve years from now. If the going…

A: Bond worth today = Present value of the bonds where, Present value of the bonds = Amount to be…

Q: Suppose a State of Califomla bond will pay 1,000 eight years from now. If the going interest rate on…

A: Worth of the bond can be calculated by discounting the future cash flow of the bond at the given…

Q: You are thinking about buying a savings bond. The bond costs $52 today and will mature in 14 years…

A: This bond is given in the question is Zero-Coupon Bond which is an issue at discount and mature at…

Q: Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the…

A: To calculate the rate of return,, 99, 254); position: relative; display: inline-block;">rate of…

Q: Suppose that an investment institution offers you two kinds of bonds and you are willing to take one…

A: Present worth of a bond means the present value of all the future payments which are going to be…

Q: uppose that you purchase a bond from a company that promises to pay $52.66 in coupon payments for…

A: The total amount that a bond pays over its lifetime includes: = Maturity Amount + Coupon Payments

Q: Suppose that you observe the following two bonds being traded, both of which pay coupons annually…

A: Price of an annuity is the present value of the payments from the annuity based on the time and…

Q: 3. What is the present value of a $20,000 payment you would receive 5 years from now, assuming an…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for four years, and…

A: A bond is a debt issued by the company whereby it has to pay regular coupons to the investor and…

Q: What is the value of this perpetuity?   5-year bond with a coupon rate of 4% has a face value of…

A: A Perpetuity is a series of payments of fixed amounts and at fixed intervals for an indefinite…

Q: Suppose you purchase a ten-year bond with 12% annual coupons. You hold the bond for four years and…

A: Companies issue bonds as debt instruments. Bond holders get coupons, or interest, from the issuing…

Q: Suppose a U.S treasury bond will pay $4,150 five years from now. If the going interest rate on…

A: Maturity price = $ 4150 Period = 5 Years Annual interest rate = 4.25%

Q: suppose you own a 40-year bond that has a bond rate of 2% per year. 1. How much money will you lose…

A: Bond is a debt security that is issued by organizations to raise debt funds from public and…

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.