Question
A zero-coupon bond with a face value of $1,000 has 7 years to maturity. If investors in this bond require a return of 6.7 %
A zero-coupon bond with a face value of $1,000 has 7 years to maturity. If investors in this bond require a return of 6.7 % p.a., what will be the price that this bond will trade at?
(Round your answer to the nearest dollar)
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To calculate the price of a zerocoupon bond we can use the present value formula for a sing...
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Step: 2
Step: 3
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
