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Author Question: ABC Inc. issued at par value a 15-year, 7% semiannual coupon bond with a par value of $1,000. At the ... (Read 49 times)

poopoo

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Question 1

A zero coupon bond with a nominal $1,000 face value has 18 years to maturity and is issued with a price of $302.50. What is the implicit interest you earn on the bond in the first year of the bond’s life, keeping all other factors constant?

$68.68


$60.05


$20.78


$17.54



Question 2

ABC Inc. issued at par value a 15-year, 7% semiannual coupon bond with a par value of $1,000. At the end of 3 years the market interest increases to 9%. One year later, the market interest is 10%. If an investor purchases the bond at the end of year 3 and sells it 1 year later, how much is the capital gain or loss?

–$49.00


–$50.31


–$52.50


–$55.60



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Marked as best answer by poopoo on Aug 7, 2023

Karla347

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poopoo

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Reply 2 on: Aug 7, 2023
Gracias!


matt95

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Reply 3 on: Yesterday
:D TYSM

 

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