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1. Suppose you purchase a 25-year, $1000-face value, zero coupon bond for $357.80 when it was issued on 3/1/2018 (next d

Posted: Wed Mar 30, 2022 3:39 pm
by answerhappygod
1. Suppose you purchase a 25-year, $1000-face value, zero coupon
bond for $357.80 when it was issued on 3/1/2018 (next day
settlement). Consider the bond in Problem 1. What would the
value of the bond be 5 years from settlement date, all else being
equal?
The YTM is 4.2%, and the answer for the value of the bond is
43.95. Can you explain how to calculate the the value of the
bond, please?