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a Myfinancelab-201840-F1-302Do Homework-dustin xDo Homework - dustin jonesx+ > https://www.mthxl.com student/playerHomework.aspx?hormeworkld.500136541&que.. Fi 302 Fall 2018 Hybrid Section Homework: Chapter 6 Homework dustin jones&1 9/28/18 4:48 PM Sav Score: 0 of 1 pt 5 of 8 (0 complete) HW Score: 0%, 0 of 8 p P6-14 (similar to) E Question Help if the Zero coupon bond wesley Company vil sun a zerocouton ond this cornng month par value is $5,000, what is the bond's price using a semiannual convention it The perected bond yeld is 3% a. the matunity is 10 years? b. the matunity is 35 years? c. the maturity is 70 years? d. the maturity is 100 years? a. What is the price of the bond using a semiannual convention if the maturity is 10 years? Round to the nearest cent) Enter your answer in the answer box and then click Check Answer

Explanation / Answer

Answer:

Price of the zero coupon bond :

(a). The maturity is 10 years.

P.v of bond = $5000/(1.015^20) = $3712.35

(b). The maturity is 35 years.

P.v of bond = $5000/(1.015^70) = $1763.38

(c). The maturity is 70 years.

P.v of bond = $5000/(1.015^140) = $621.91

(d). The maturity is 110 years.

P.v of bond = $5000/(1.015^200) = $254.54

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