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A bank has just issued a 10,000/= par value zero coupon bonds with 10% yield to maturity. The bond is due to mature in 15 years from today (Assume a semiannual compounding) What is the market price of this bond? If Interest rates remain constant what will be the price of the bond in four years If interest rates rise to 12%, what will be the price in four years

A bank has just issued a 10,000/= par value zero coupon bonds with 10% yield to maturity. The bond is due to mature in 15 years from today (Assume a semiannual compounding) What is the market price of this bond? If Interest rates remain constant what will be the price of the bond in four years If interest rates rise to 12%, what will be the price in four years

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A bank has just issued a 10,000/= par value zero coupon bonds with 10% yield to maturity. The bond is due to mature in 15 years from today (Assume a semiannual compounding)

  1. What is the market price of this bond? 
  2. If Interest rates remain constant what will be the price of the bond in four years
  3. If interest rates rise to 12%, what will be the price in four years

 

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