Purchase Solution

Zero Coupon Bond Pricing

Not what you're looking for?

Ask Custom Question

Assume that you require a 14 percent return on a zero-coupon bond with a par value of $1,000 and six years to maturity. What is the price you should be willing to pay for this bond?

Please explain as simply as possible so that I may understand better.

Purchase this Solution
Solution Summary

This solution assists with a zero coupon bond pricing problem.

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
Recent Feedback
  • "ty i have more need help with"
  • "ty i have jmore i need help with"
  • "great help"
  • "excellent help"
  • "Very helpful and easy to understand."
Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Introduction to Finance

This quiz test introductory finance topics.

Basics of corporate finance

These questions will test you on your knowledge of finance.

View More Free Quizzes
Related BrainMass Solutions

  • Zero-coupon bonds

    23240 Bond pricing, maturity and yield maturity for 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.

  • Zero Coupon Bonds and Bond Pricing

    45165 Bond Pricing is considered. Fill in the table for the following zero Coupon bonds. The face value of each bond is $1,000. Price Maturity(years) Yield to Maturity $300 30 ?

  • Bonds- Price, YTM, Duration

    Assignment hint: You will need to use the T-Note data to bootstrap a zero coupon treasury curve and apply the Z-spread to price the Abacus bond.

  • Bond pricing using zero coupon bonds

    572783 Bond pricing using zero coupon bonds A 7% annual coupon bond (face value $1,000), with three years left till maturity is selling for $986.90.

  • Bond Price and Yield

    595898 Bond Price and Yield 1. A) Calculate the price of a zero coupon bond that matures in 20 years if the market interest rate is 6.5 percent. B) Assume semi-annual compounding. 2.

  • Zero Coupon Bonds and Face Value

    Bond Pricing. Fill in the Table below for the following zero-coupon bonds. The face value of each bond is $1000.

  • Describing a Bond

    (Prices of high coupon bonds are less sensitive to changes in interest rates than prices of low coupon bonds. Zero coupon bonds are the most sensitive.

  • Finance - Bond Pricing

    48387 Finance - Bond Pricing 1. Bond Pricing. A 30-year maturity bond with face value $1,000 makes annual coupon payments and has a coupon rate of 8 percent.

  • Bond Valuation

    20-year, zero coupon bond, 10-year, zero coupon bond, 20-year, 10% coupon bond, 20-year, 5% coupon bond, or 1-year, 10% coupon bond. Answer: The greatest percentage increase in value is for the bond which has the largest duration.

View More Related Solutions