Assume the federal government decides in jan 1, 2024, they'll issue a 5 year "Year" bond, that will pay the bondholder a cash flow payment equal to whatever year it is on Jan 1 for the next 5 years. Treasuries are trading at 5%. What would the market price of this security be rounded to the nearest dollar?

Assume the federal government decides in jan 1, 2024, they'll issue a 5 year "Year" bond, that will pay the bondholder a cash flow payment equal to whatever year it is on Jan 1 for the next 5 years. Treasuries are trading at 5%. What would the market price of this security be rounded to the nearest dollar?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 11P

See similar textbooks

Similar questions

QUESTION 24 Assume that today, the annualized two-year interest rate is 8 percent. A three-year security has an annualized interest rate of 14 percent. What is the one-year forward rate two years from now? For example, if you find that the forward rate is 15.25, type "15.25" in the box.
If a bond will pay $50 interest per year into perpetuity, at what price will this bond sell when the economy-wide interest rate is 5 percent? $50 $250 $500 $1000
Question 4 If the interest rate is 10%, what is the present value of a security that pays you K1,100 next year, K1,210 the year after, and K1,331 the year after that? Find the investment yield of a 90-day T-bill for K380milion per K400million face value. 3. Explain the repayment schedule of Zambia’s ten-year US$750 million Eurobond issued in 2012
A 1 year government treasury bill will pay you $1,000 when it matures 1 year from now (no interest/coupon payments). If the going interest rate on a 1 year T- Bill is 0.75% what would you be willing to pay for the investment today? Question 2Answer a. $992.56 b. $571.43 c. $999.93 d. $1,333.33
question 1 In two years, a bond will start paying out an annual annuity of 20:-, after which the annuity will increase by 2% per year. The bond will pay out an annuity for 30 years. No face value has been paid in the last year. What does the bond cost today? Use a return requirement of 7%. Ignore taxes.
Question 4 a.If the interest rate is 10%, what is the present value of a security that pays you K1,100 next year, K1,210 the year after, and K1,331 the year after that? b.Find the investment yield of a 90-day T-bill for K380milion per K400million face value. c.Explain the repayment schedule of Zambia’s ten-year US$750 million Eurobond issued in 2012.
24. Azizi Bank raises funds through the issuance of a bond which will pay $2,500 at the end of each year for 15 years and on the date of the last payment will also make a separate payment of $100,000. If the investors’ required rate of return on this investment is 9%, how much would they be willing to pay for the Azizi Bank bond today?
You want to invest a 201911130 $ in your saving account at the end of the first year and increase this amount by $1,200,000 for each of the next 11 years Then what should be the size of an annual uniform deposit that yields an equal balance with the above by the end of 11 years if the interest rate is 3%?
The Time Value of Money. 2.1-2.2: The U.S. government has a consol bond which pays $100 per year forever. Assume the current interest rate is 3% per year. 2.1 What is the value of the consol bond immediately after a payment is made?- 2.2 What is the value of the consol bond immediately before a payment is made?- w ww w
Suppose that if you purchase a US Treasury bond, it will pay you a one-time payment of $5000 in 10 years from now. What interest rate would you earn if you bought this bond for $3000?
2. A deferred annuity is purchased that will pay P8, 000 per quarter for 20 yea after being deferred 10 years and with interest rate of 8 % compounded quarter What is the present value of the annuity? 2022.02.07 19:57
10 Year Government Bonds Yield Curve for Turkey as of November 15, 2020 is given. a) For the 10 Year Government Bonds Yield Curve for Turkey, what is the market predicting about the movement of future short-term interest rates? Explain in detail using the Expectations Theory.