Zero-coupon bonds
I need help in figuring out the attached finance problem:
Bond Pricing: Fill in the table below for the following zero-coupon bonds. The face value of each bond is $1,000.
See attached file for full problem description.
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Solution Preview
First scenario (calculating yield to maturity)
$1,000 = $300 * (1 + YTM)^30
YTM = (1000/300)^(1/30) - 1 = 0.0409 ...
Solution Summary
This solution looks at bond pricing, maturity and yield to maturity for zero-coupon bonds.
$2.49