The Shamrock Corporation has just isssued a $1,000 par value zero-coupon bond with an 8 percent yield to maturity, due to mature 15 years from today. (Assume semiannual compounding). a. What is the market price of the bond? b. If interest rates remain constant, what will be the price of the bond in three years? c. If interest rates rise to 10 percent, what will be the price of the bond in the three years?
The Shamrock Corporation has just isssued a $1,000 par value zero-coupon bond with an 8 percent yield to maturity, due to mature 15 years from today. (Assume semiannual compounding). a. What is the market price of the bond? b. If interest rates remain constant, what will be the price of the bond in three years? c. If interest rates rise to 10 percent, what will be the price of the bond in the three years?
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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The Shamrock Corporation has just isssued a $1,000 par |
a. What is the market price of the bond? | |||||
b. If interest rates remain constant, what will be the price of the bond in three years? | |||||
c. If interest rates rise to 10 percent, what will be the price of the bond in the three years? |
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