Question
MC Qu. 9 Zero Coupon Bond Price Calculate the price of a zero coupon bond? Zero coupon Bond price calculate the price of a zero coupon that matures in 8 years if the market interest rate is 10 percent. Calculate the price of a 5.8 percent coupon bond with 10 years left to maturity and a market interest rate of 7.0 percent (Assume interest payments are semiannual ) (Do not round Intermediate calculations and round your final answer to 2 decimal places.) One year Treasury bills currently earn 3.55 percent. You expect that one year from now, 1-year treasury bill rates will increase to 3.75 percent. The liquidity premium on 2-year securities is 0.04 percent. If the liquidity theory is correct. What should the current rate be on 2-year Treasury securities?
Explanation / Answer
Solution-1
Solution-2
N=34, I=2.7, PMT=28, FV=1000 CPT PV = -408.99
Face Value at Maturity = $ 1,000 Time to Maturity = 8 Interest Rate on Bond = 10.00%
Price of the Bond = $ 466.51
