--%>

Problem on zero bond price

You are provided a bond which will pay no interest however will return the par value of $1,000 20 years from now. When your needed return for this bond is 7.35%, what are you willing to reimburse or pay?

E

Expert

Verified

Zero-coupon bond price = F (1 + i)-n = $1,000 (1 + .0735)-20 = $1,000(.2420800635) = $242.08

   Related Questions in Microeconomics

  • Q : Signals for sellers Can someone help me

    Can someone help me in finding out the right answer from the given options. The signals for sellers to lower the market price comprise: (i) Fast depletion of goods from the retail store shelves. (ii) Producers encompass more orders than they can hold.

  • Q : Problem regarding goals of Labor Union

    I have a problem in economics on goals of Labor Union. Please help me in the following question. Trade unions are reasonably supposed to try to maximize merely: (1) Wage rate. (2) Level of employment. (3) Total wage costs paid by the employers. (4) No

  • Q : Function of Capitalization Winning

    Winning $50,000 yearly for 20 years is similar as winning: (w) $1 million today. (x) less than $1 million today. (y) more than $1 million today. (z) $100 per day, forever. Hello guys I want your advice. Please recommend some views

  • Q : Normal profit Normal profit signifies

    Normal profit signifies zero economic profit. Explain why?

  • Q : Can GDP be more than GNP Can GDP be

    Can GDP be more than GNP? Answer: Yes, GDP can be greater or more than GNP if NFIA is negative.

  • Q : Average Variable Cost-Average Total

    Describe the relationship among Average Variable Cost (AVC) Average, Total Cost (ATC) and marginal Cost (MC)? Answer: A) If MC

  • Q : Normal accounting profits in monopoly

    This monopoly makes Q units and experiences as: (1) economic profits equal to 0cbQ. (2) economic losses equal to cpab. (3) more than normal accounting profits. (4) marginal cost in excess of average total cost. (5) total revenue less than total cost.<

  • Q : Price elasticity of supply computations

    At a $2 price per can, there quantity of applesauce supplied per day is 1000 cases; and at $4, the quantity supplied is 3000 cases per day. Therefore price elasticity of supply is: (i) 2/3. (ii) 1/3.(iii) 3/2. (iv) 1/4.

    Q : Form of Discrimination The form of

    The form of discrimination which probably causes the smallest problems for income distribution is: (1) occupational discrimination. (2) human capital discrimination. (3) price discrimination. (4) personal discrimination. (5) employment discrimination.

  • Q : Short-run and long-run average total

    A firm generating where MC = SRAC = LRAC operates at the minimum point of its: (w) short-run and long-run average total cost curves. (x) long-run total cost curve. (y) total physical product of labor curve. (z) maximum profit curve.

    Discover Q & A

    Leading Solution Library
    Avail More Than 1445135 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads
    No hassle, Instant Access
    Start Discovering

    18,76,764

    1950141
    Asked

    3,689

    Active Tutors

    1445135

    Questions
    Answered

    Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

    Submit Assignment

    ©TutorsGlobe All rights reserved 2022-2023.