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Bond valuation. If a $1,000 zero coupon bond with a 10-years maturity has a market pricem

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Due on: 11/16/2017
Posted On: 11/16/2017 09:07 AM

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18. Bond valuation. If a $1,000 zero coupon bond with a 10-years maturity has a market price of $508.30, what is the rate of return?


19. Bond valuation. A tax-exempt bond was recently issues at an annual 10 percent coupon rate and mature 15 years from today. The par value of the bond is 1,000.

A. If required market are 10 percent, what is the market price bond?

B. If required market are 5 percent, what is the market price bond?

C. If required market rate rise to 14 percent, what is the market price bond?

D. At what required market rate (10 percent, 5 percent, or 14 percent) does the above bond sell at a discount? At a premium?


20. Bond valuation. A tax-exempt bond was recently issued at an annual 8 percent coupon rate and mature 20 years from today. The par value of the bond is $5,000.

A. If required market rates are 8 percent, what is the market price of the bond?

B. If required market rates fall 4 percent, what is the market price of the bond?

C. If required market rates rise 12 percent, what is the market price of the bond?

D. At what required market rate (8 percent, 4 percent, or 12 percent) does the above bond sell at a discount? At a premium?

Tags bond maturity market pricem 10years coupon valuation 0 zero bond market percent required price rate rates valuation coupon value today premium rise years does discount sell annual mature 0 taxexempt recently iued fall 1 zero maturity iues return 2

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