Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 decimal places.)| Bond Type | Interest Payment ||-----------------------------------------------------|------------------|| 3.65 percent coupon corporate bond (paid semiannually) | || 4.40 percent coupon Treasury note | || Corporate zero-coupon bond maturing in 10 years | $0 |Explanation:- The table lists three types of bonds with an interest payment calculation based on a $1,000 par value.- The interest payment for the corporate bond and Treasury note is left to be calculated. The corporate zero-coupon bond has an interest payment of $0 as it does not pay periodic interest, only principal at maturity.

The interest amount of a bond is calculated as periodic payment on a fixed interval. The coupon rate decides the interest amount of any bond.The par value (P)= $ 1000 Interest payment (IP) IP=P*Coupon*Time a) for 3.05% coupon bond ( semi -annual) IP=1000*3.05%*(1/2)=30.50*1/2=$15.25 b) 4.40% treasury note (treasury note pays semi-annual interest) IP=1000*4.40%*1/2=$22 C) For zero coupon bond IP=$ 0

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Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 declmal places.) 3.65 percent coupon corporate bond (paid semiannually) 4.40 percent coupon Treasury note Corporate zero-coupon bond maturing in 10 years %24

Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 declmal places.) 3.65 percent coupon corporate bond (paid semiannually) 4.40 percent coupon Treasury note Corporate zero-coupon bond maturing in 10 years %24

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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