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QUESTION 5 a) List FOUR characteristics of a Zero-Coupon bond. [ 4 Marks] b) Amna Enterprises LLC wants to issue 100 20-year, AED 1,000 par
QUESTION 5
a) List FOUR characteristics of a Zero-Coupon bond. [ 4 Marks]
b) Amna Enterprises LLC wants to issue 100 20-year, AED 1,000 par value zero-coupon bonds. Suppose each zero coupon bond is to yield 8% calculate,
i) The price of the bond. [4 Marks]
ii) Determine how much Aman Enterprise will receive (ignoring issuance costs) when the bonds are first sold.
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