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Use equation to answer following question: Price = Face value / (1 + rate)^periods Performance Of Securities 1. (1 point.) Suppose a 10-year zero-coupon Treasury
Use equation to answer following question: Price = Face value / (1 + rate)^periods
Performance Of Securities 1. (1 point.) Suppose a 10-year zero-coupon Treasury bond with face value $1000 has a 4% yield (annually compounded). (a) What is the price of this bond? (b) Suppose another zero-coupon Treasury bond also has a 4% yield (annually compounded) and $1000 face value, but sells for $208.29. What is the maturity of this bond? (c) Finally, suppose a zero-coupon Treasury bond has a yield of 4% with a maturity of 5 years. This bond sells for $82.19. What is the face value of the bond? Performance Of Securities 1. (1 point.) Suppose a 10-year zero-coupon Treasury bond with face value $1000 has a 4% yield (annually compounded). (a) What is the price of this bond? (b) Suppose another zero-coupon Treasury bond also has a 4% yield (annually compounded) and $1000 face value, but sells for $208.29. What is the maturity of this bond? (c) Finally, suppose a zero-coupon Treasury bond has a yield of 4% with a maturity of 5 years. This bond sells for $82.19. What is the face value of the bondStep by Step Solution
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