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
Karo-lina-s [1.5K]
3 years ago
8

An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has

a yield to maturity of 8.9%. Bond C pays a 10% annual coupon, while Bond Z is a zero coupon bond. Assuming that the yield to maturity of each bond remains at 8.9% over the next 4 years, calculate the price of the bonds at each of the following years to maturity.
Years to Maturity Price of Bond C Price of Bond Z
4 $ $
3 $ $
2 $ $
1 $ $
0 $ $
Business
1 answer:
aliya0001 [1]3 years ago
4 0

Answer:

Years to maturity       Price of Bond C            Price of Bond Z

         4                               $1,084.42                       $711.03

         3                               $1,065.93                       $774.31

         2                               $1,045.80                      $843.23

         1                                $1,023.88                       $918.27

Explanation:

Note: See the attached excel for the calculations of the prices of Bond C and Bond Z.

The price of each bond of the bond can be calculated using the following excel function:

Bond price = -PV(rate, NPER, PMT, FV) ........... (1)

Where;

rate = Yield to maturity of each of the bonds

NPER = Years to maturity

PMT = Payment = Coupon rate * Face value

FV = Face value

Substituting all the relevant values into equation (1) for each of the Years to Maturity and inputting them into relevant cells in the attached excel sheet, we have:

Years to maturity       Price of Bond C            Price of Bond Z

         4                               $1,084.42                       $711.03

         3                               $1,065.93                       $774.31

         2                               $1,045.80                      $843.23

         1                                $1,023.88                       $918.27

Download xlsx
You might be interested in
The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6: Cash balance
frez [133]

Answer:

bank statement                                          56,300

Checks outstanding                                  (25,390)

Deposit in transit not recorded by bank<u>    13,325  </u>

Adjusted bank statement                           44,235‬

Cash account                                       42,920

Bank debit memo for service charges      (35)

check register error:                         <u>       1,350   </u>

Adjusted cash account                         44,235

Explanation:

The procedure is to adjust for the unknow information and mistake of each party.

The bank is unaware of the check outstanding and deposit in transit

The company thanks to the banbk statement gets information about a mistake in his check register as it was posted for 1,500 when it should be 150.

6 0
4 years ago
The term ______ describes circumstances where a country's exports exceed it imports.
Misha Larkins [42]

Trade surplus or positive trade balance.

Both of these terms refer to the situation of higher exports than imports.

8 0
3 years ago
In 2009, __________ of all pedestrian fatalities were caused by impaired drivers.
Goshia [24]
Over 90 percent of the pedestrian fatalities occurred in single- vehicle crashes. In 2009, pedestrian deaths accounted for 12 percent of all traffic fatalities in motor vehicle traffic crashes. Since 2000, the number of pedestrian fatalities has decreased by 14 percent.
8 0
3 years ago
Read 2 more answers
Cecil has a credit card that uses the adjusted balance method. For the first 10 days of one of his 30-day billing cycles, his ba
Stels [109]

Answer:

To calculate the amount of interest that Cecil was charged we can use the following formula:

interest charged = (APR / 365) x 30 days x adjusted balance

where:

Adjusted balance = previous balance – current payments  = $340 - $150 = $190

interest charged = (19% / 365) x 30 x $190 = $2.97

3 0
3 years ago
I like work at a besiness
Evgen [1.6K]

Answer:

OK??

Explanation: Up at answer

5 0
3 years ago
Other questions:
  • Bettina likes to know the end from the beginning. She gathers as much information as possible before making a decision. Bettina
    8·1 answer
  • Tv advertising is considered to be particularly advantageous because ________.
    14·1 answer
  • You are trying to save up for a spa package that costs $300. After looking at your paycheck, you decide that you will be able to
    11·2 answers
  • Suppose a student has 3 hours of time to spend at her apartment before afternoon classes. She has the option of doing laundry, s
    10·1 answer
  • When politicians argue that the outsourcing or offshoring of techincal support to India by the Dell Computer Corporation is harm
    5·1 answer
  • Suppose Brian is in the market for a used textbook and the campus bookstore is having a sale. If the initial price of the used b
    5·1 answer
  • What are some different demographic segmentations Amazon can identify to understand customer behavior?​
    11·1 answer
  • Journalize the following sales transactions for Straight Shot Archery using the periodic inventory system. E (Record debits firs
    15·1 answer
  • The demand for spring water at the SLC WalMart is 600 liters per week. The setup cost for placing an order to replenish inventor
    15·1 answer
  • An agreement exists when one party offers a certain bargain to another party.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!