--%>

Zero coupon bonds problem

Shana wants to purchase 5-year zero coupon bonds with a face value of $1,000. Her opportunity cost is 8.5 %. Supposing annual compounding, what would be the present market price of such bonds? (Round to the closest dollar.) (a) $1,023  (b) $665  (c) $890  (d) $1,113

Can someone help me in getting through this problem.

   Related Questions in Corporate Finance

  • Q : What are Workpapers Workpapers : In

    Workpapers: In finance world, work papers are documents which are created during the procedure of computing the financial records of a business or individual. The accounting professional which is tasked with examining the book-keeping of a business mi

  • Q : Road King Trucks Project I want to know

    I want to know how much do you charge for doing the project?

  • Q : Overview of capital market efficiency

    Provide a brief overview of Capital Market Efficiency?

  • Q : Calculated Free Cash Flow I think Free

    I think Free Cash Flow (FCF) can be acquired from the Equity Cash Flow (CFac) using the relation as: FCF = CFac + Interests – ΔD. Is it true?

  • Q : Zero Coupon Bonds-Corporate Bonds

    Describe the term Zero Coupon Bonds in Corporate Bonds?

  • Q : What are the different types of

    What are the different types of mathematics found in quantitative finance?

  • Q : Explain useful properties of

    Explain useful properties of low-discrepancy sequence theory or quasi random number theory.

  • Q : What is real gross domestic product

    Real gross domestic product: If GDP of a particular year is estimated or evaluated on the basis of the base year prices it is termed as real gross domestic product.

  • Q : Finance I need the answers for the

    I need the answers for the midterm exam for FIN6000

  • Q : Problem on HIBOR Below are the

    Below are the three-month HIBOR and three-year EFN futures (that is, Exchange Fund Note) prices for the September 2010 contracts.a) Find out the HIBOR in three-months for settling the future contract utilizing the quotation on August 16.

    Discover Q & A

    Leading Solution Library
    Avail More Than 1433560 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads
    No hassle, Instant Access
    Start Discovering

    18,76,764

    1931826
    Asked

    3,689

    Active Tutors

    1433560

    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.