You find a zero coupon bond with a par value of $10,000 and 27 years to maturity. The yield to maturity on this bond is 4.9 perc

Question

3 years ago

7

ent. Assume semiannual compounding periods. What is the price of the bond

1 answer:

viktelen [127] · Answer 1 · 2022-05-28T13:00:20+03:00

Answer:

$2,706.16

Explanation:

The Price of the Bond is also known as its Present Value or PV.

This is calculated as follows :

FV = $10,000

N = 27 × 2 = 54

I = 4.9 %

P/YR = 2

PMT = $0

PV = ?

Using a financial calculator to input the value as above, the PV is $2,706.16

Therefore, the price of the bond is $2,706.16