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You find a zero coupon bond with a par value of $10,000 and 13 years to maturity. The yield to maturity on this bond is 5 percent. Assume semiannual compounding periods. What is the dollar price of the bond?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Bond price

You find a zero coupon bond with a par value of $10,000 and 13 years to maturity. The yield to maturity on this bond is 5 percent. Assume semiannual compounding periods. What is the dollar price of the bond?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Bond price

Essentials Of Investments
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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**Zero Coupon Bond Valuation** You find a zero coupon bond with a par value of $10,000 and 13 years to maturity. The yield to maturity on this bond is 5 percent. Assume semiannual compounding periods. What is the dollar price of the bond? *(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)* - **Graph/Diagram Explanation:** - There is no graph or diagram associated with this text. - **Input Field:** - There is an interactive field labeled "Bond price" for entering the calculated price of the bond. This content is representative of financial education material related to bond valuation using present value calculations. The exercise requires understanding the concept of zero coupon bonds and the impact of yield to maturity and compounding periods on bond pricing.
Transcribed Image Text:**Zero Coupon Bond Valuation** You find a zero coupon bond with a par value of $10,000 and 13 years to maturity. The yield to maturity on this bond is 5 percent. Assume semiannual compounding periods. What is the dollar price of the bond? *(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)* - **Graph/Diagram Explanation:** - There is no graph or diagram associated with this text. - **Input Field:** - There is an interactive field labeled "Bond price" for entering the calculated price of the bond. This content is representative of financial education material related to bond valuation using present value calculations. The exercise requires understanding the concept of zero coupon bonds and the impact of yield to maturity and compounding periods on bond pricing.
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