Question
1. Ten-year zero coupon bonds issued by the U.S. Treasury have a face value of $1,000 and interest is compounded semiannually. If similar bonds in
1. Ten-year zero coupon bonds issued by the U.S. Treasury have a face value of $1,000 and interest is compounded semiannually. If similar bonds in the market yield 11.4 percent, what is the value of these bonds? (Round answer to 2 decimal places, e.g. 15.25.)
2. Margaret Moore is interested in buying a five-year zero coupon bond with a face value of $1,000. She understands that the market interest rate for similar investments is 8.9 percent. Assume annual coupon payments. What is the currentvalue of this bond? (Round answer to 2 decimal places, e.g. 15.25.)
3. Sandhill, Inc., has issued a three-year bond that pays a coupon rate of 9.6 percent. Coupon payments are made semiannually. Given the market rate of interest of 4.8 percent, what is the market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.)
4. Sandhill Corp is issuing a 10-year bond with a coupon rate of 9 percent. The interest rate for similar bonds is currently 4 percent. Assuming annual payments, what is the value of the bond? (Round answer to 2 decimal places, e.g. 15.25.)
5. Sunland Corp. management plans to issue seven-year zero coupon bonds. It has learned that these bonds will sell today at a price of $443.26. What is the yield to maturity on these bonds? (Round answer to 3 decimal places, e.g. 15.251%.)
answer all questions please :)
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