ncial cakalater caleulated You designed nsing ca IA3 3etof problems 13 de s to b

Question

ncial cakalater caleulated You designed nsing ca IA3 3etof problems 13 de s to be the Excel or financial calculator. You can albo uze algebraic a formulas. Do not use financial tables to calculate these problema. Question 1 (1 point) Marco Chip. Inc just issued zero-coupon bonds with a par value of $1.000. The bond has a maturity of 15 years and a yield to maturity of 804 percent, compounded semi-annually What is the current price of the bond? Round the answer to two decimal places. Your Answer: Answer Save Page 1 of 4 Next Page Save All Responses Go to Submit Quiz

Explanation / Answer

Price=Face Value (or Par Value)/(1+YTM/2)^(2*n)

n is number of years

As it is semiannual compounding, we have divided YTM by 2 and multiplied n by 2

So, price=1000/(1+8.04%/2)^30=306.5452

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