« previous next »

Author Question: Which of the following types of bonds, as characterized by a feature, by definition has two coupon ... (Read 52 times)

lracut11

  • Hero Member
  • *****
  • Posts: 536
on: Jul 10, 2018
Which of the following types of bonds, as characterized by a feature, by definition has two coupon payments per year?
 
  A) Consol
  B) Semiannual
  C) Zero-coupon
  D) Putable

Question 2

RC Inc. just issued zero-coupon bonds with a par value of 1,000. If the bond has a maturity of 15 years and a yield to maturity of 10, what is the current price of the bond if it is priced in the conventional manner?
 
  A) 1,000
  B) 239.39
  C) 231.38
  D) This question cannot be answered because the coupon payment information is missing.


nickk12214

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: B

Answer to Question 2

Answer: C
Explanation: C) The conventional way to price a zero-coupon bond is to discount the par value assuming semiannual compounding. Zero-coupon Bond Price = = = 231.38.
MODE = END, P/Y = 2, C/Y = 2
INPUT 30 10 ? 0 -1,000
KEY N I/Y PV PMT FV
CPT 231.38


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The National Institutes of Health have supported research into acupuncture. This has shown that acupuncture significantly reduced pain associated with osteoarthritis of the knee, when used as a complement to conventional therapies.

Did you know?

Earwax has antimicrobial properties that reduce the viability of bacteria and fungus in the human ear.

Did you know?

The FDA recognizes 118 routes of administration.

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Did you know?

The first oncogene was discovered in 1970 and was termed SRC (pronounced "SARK").

Types of Autonomic Receptors Types of Autonomic Receptors
Types of Etiology of Shock Types of Etiology of Shock
Hydrolysis of peptide bonds Hydrolysis of peptide bonds
Types of Respiratory Protection Devices Types of Respiratory Protection Devices
Chemical Bonds Chemical Bonds
A Bat Ray cruising through the water column below the "sunburst." Bat Rays are types of ... A Bat Ray cruising through the water column below the "sunburst." Bat Rays are types of ...
Video: ATPase function - membrane transport, contractile proteins and synthesis

For a complete list of videos, visit our video library