1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Lubov Fominskaja [6]
1 year ago
6

What is the current value of a zero-coupon bond that pays a face value of $1,000 at maturity in 7 years if the appropriate disco

unt rate is 11%.?
Business
1 answer:
zvonat [6]1 year ago
5 0

The current value of a zero-coupon bond is $481.658412.

<h3>What is a zero-coupon bond?</h3>
  • A zero coupon bond (also known as a discount bond or deep discount bond) is one in which the face value is repaid at maturity.
  • That definition assumes that money has a positive time value.
  • It does not make periodic interest payments or has so-called coupons, hence the term zero coupon bond.
  • When the bond matures, the investor receives the par (or face) value.
  • Zero-coupon bonds include US Treasury bills, US savings bonds, long-term zero-coupon bonds, and any type of coupon bond that has had its coupons removed.
  • The terms zero coupon and deep discount bonds are used interchangeably.

To find the current value of a zero-coupon bond:

First, divide 11 percent by 100 to get 0.11.

  • 11%/100 = 0.11

Second, add 1 to 0.11 to get 1.11.

  • 1 + 0.11 = 1.11

Third, raise 1.11 to the seventh power to get 2.07616015.

  • 1.11⁷ = 2.07616015

Divide the face value of $1,000 by 1.2653 to find that the price to pay for the zero-coupon bond is $481.658412.

  • $1,000/1.2653 = $481.658412

Therefore, the current value of a zero-coupon bond is $481.658412.

Know more about zero-coupon bonds here:

brainly.com/question/19052418

#SPJ4

You might be interested in
Hushovd Iron Works has collected the following data for its Thunderbolt line of products:Direct materials standard 10 pounds per
Dima020 [189]

Answer:

The correct answer is D: $3500 unfavorable

Explanation:

Giving the following information:

Standard:

Direct materials standard 10 pounds per unit

Direct materials standard cost $0.75 per pound

Actual:

Material purchased cost $0.85 per pound

Direct materials purchased 40,000 pounds

Direct materials used 35,000 pounds

Finished goods produced 4,500 units

Direct material price variance= (SP-AP)*AQ

SP= standard price

AP= actual price

AQ= standard quantity

Direct material price variance= (0.75-0.85)*35000

Direct material price variance= $3500 unfavorable

7 0
3 years ago
Can I Plss get some help on this
Lyrx [107]

If the unemployment rate is 10%, the relevant fiscal policy action would be to A. increase government spending.

<h3>Why should we increase government spending?</h3>

When government spending is increased, it would lead to more jobs in the economy as the government hires people for projects.

Unemployment would also decrease as companies hire more people to produce as they receive more demand based on the increased government spending.

Find out more on fiscal policy at brainly.com/question/6583917.

#SPJ1

4 0
2 years ago
. A rise in the price of corn will cause a (Click to select) in the Supply Curve for corn. b. A decrease in the price of seed (a
Nadusha1986 [10]

Answer:

move along upwards

shift out

shift in

Explanation:

A change in price of a good leads to a movement along the supply curve and not a shift of the supply curve.

Other factors other than a change in the price of the good would lead to a shift of the supply curve. Such factors include :

  1. A change in the price of input
  2. A change in the number of suppliers
  3. Government regulations

When the price of corn increases, the quantity supplied of corn increases. this is in line with the law of supply.

according to the law of supply, the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.

This would lead to a movement up along the supply curve

If the price of seed which is an input to corn decreases, it becomes cheaper to produce corn. As a result, the supply of corn would increase. this would lead to an outward shift of the supply curve.

If the number of grocery stores decreases, there would be a reduction in supply. As a result, the supply curve would shift inwards

8 0
3 years ago
_____ refers to what each party gets in exchange for his or her promise under a contract.
wlad13 [49]
Consideration refers to what each party gets in exchange for his or her promise under a contract. A contract has four elements: agreement, consideration, contractual capacity, and legal object. Agreement refers to the contract itself, consideration to the results of the contract, contractual capacity represents your legal ability to sign the contract, and legal object is the purpose of the agreement.
4 0
3 years ago
How can cybercriminals harm a person whose personal information they have stolen?
Leokris [45]
When a person obtains someone else's personal information, these are some thing that could potentially happen that would harm the person whose identity has been stolen: Open new lines of credit (can harm your credit and incur debt). Seek medical attention (could be harmful by getting incorrect medical information on your record, or incurring debt). Drain savings and retirement accounts Provide an alias when arrested (harmful if the cops look for you when the other person runs, or if the other person uses your information to pay bail. Get a job and file false tax returns (could be harmful when the IRS sees the records and <span>thinks that you are not paying taxes on all of your income).</span>
3 0
3 years ago
Other questions:
  • Parents want to setup an account for their child studying abroad for next 2 years, where they can receive a monthly allowance of
    11·2 answers
  • A measure of output for any given project, task, or activity is called:
    6·2 answers
  • Suppose that your firm's current unlevered value, V*, is $800,000, and its marginal corporate tax rate is 35 percent. Also, you
    15·1 answer
  • If jasmine sleeps for 12 hours each night and takes two naps during the day, jasmine is most likely to be:
    10·1 answer
  • 1. An economy is initially at full employment, but a decrease in planned investment spending (a component of autonomous expendit
    8·1 answer
  • Using the information below for Sundar Company; determine the cost of goods manufactured during the current year:Direct material
    5·1 answer
  • Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial
    12·1 answer
  • Jane Smith, MD, has had a great year in her pediatrics practice and has cash that she wants to invest. Her financial adviser sug
    6·1 answer
  • Which of the following do you NOT need to open a checking account?
    10·1 answer
  • Investment depends on the ______ interest rate, and money demand depends on the ______ interest rate. a. real; real b. nominal;
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!