please answer within 30 minutes. A zero-coupon bond with a face-value of 2679 has 3years until maturity. If the implied rate of annualinterest on the bond is 0.07 compounded semi-annually, what is the price of the bond now?A zero-coupon bond with a $1000 face-value has 24years left to maturity. The interest rate on the bond iscurrently 10%, but you are certain that interest rateson this bond is going to go from 10% to 15% in 12years.How many dollars will the bond payout at the point ofmaturity?

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Answered: A zero-coupon bond with a face-value of…

A zero-coupon bond with a face-value of 2679 has 3 years until maturity. If the implied rate of annual interest on the bond is 0.07 compounded semi- annually, what is the price of the bond now?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

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.

Question

please answer within 30 minutes.

A zero-coupon bond with a face-value of 2679 has 3
years until maturity. If the implied rate of annual
interest on the bond is 0.07 compounded semi-
annually, what is the price of the bond now?
A zero-coupon bond with a $1000 face-value has 24
years left to maturity. The interest rate on the bond is
currently 10%, but you are certain that interest rates
on this bond is going to go from 10% to 15% in 12
years.
How many dollars will the bond payout at the point of
maturity?

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