« previous next »

Author Question: Which of the following types of bonds, as characterized by a feature, by definition has two coupon ... (Read 47 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?

There are 20 feet of blood vessels in each square inch of human skin.

Did you know?

The toxic levels for lithium carbonate are close to the therapeutic levels. Signs of toxicity include fine hand tremor, polyuria, mild thirst, nausea, general discomfort, diarrhea, vomiting, drowsiness, muscular weakness, lack of coordination, ataxia, giddiness, tinnitus, and blurred vision.

Did you know?

Signs and symptoms of a drug overdose include losing consciousness, fever or sweating, breathing problems, abnormal pulse, and changes in skin color.

Did you know?

Certain chemicals, after ingestion, can be converted by the body into cyanide. Most of these chemicals have been removed from the market, but some old nail polish remover, solvents, and plastics manufacturing solutions can contain these substances.

Did you know?

Pink eye is a term that refers to conjunctivitis, which is inflammation of the thin, clear membrane (conjunctiva) over the white part of the eye (sclera). It may be triggered by a virus, bacteria, or foreign body in the eye. Antibiotic eye drops alleviate bacterial conjunctivitis, and antihistamine allergy pills or eye drops help control allergic conjunctivitis symptoms.

Types of Fractures Types of Fractures
Types of Epithelia Types of Epithelia
Types and locations of epithelial tissues. Types and locations of epithelial tissues.
Types and locations of connective tissues. Types and locations of connective tissues.
The three types of muscle: Skeletal, cardiac, and smooth. The three types of muscle: Skeletal, cardiac, and smooth.
Personality Types in Harry Potter Personality Types in Harry Potter
Video: Parkinson's Disease

For a complete list of videos, visit our video library