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Zero coupon bonds

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Three years ago, the firm issues 300,000 30 year, zero coupon bonds. The bonds have a face value of $1,000 and originally sold for $76.45. Currently, the bonds sell for $97.61.

What is the combined Market Value of the Zero Coupon Bonds today?

What is the Yield on the Zero Coupon Bonds. Remember = these are 30 year bonds but were issued THREE years ago (hint-what is "n"?)

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Solution Summary

The solution explains how to calculate the price and yield on a zero coupon bond

Solution Preview

Market value = Number of bonds X Price per Bond
Combined market value = 300,000 bonds X $97.61 per bond = ...

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