A zero coupon bond has a face value of $ 1 comma 000$1,000 and matures in...

Question

Question

A zero coupon bond has a face value of

$ 1 comma 000$1,000

and matures in

44

years. Investors require a(n)

7.4 %7.4%

annual return on these bonds. What should be the selling price of the bond?

The price of the bond is

$

business finance

Answer 1

Answer #1

Price of the bond = Face value / (1 + r)^t

Price of the bond = $1,000 / (1 + 0.074)⁴

Price of the bond = $751.59

Answer 2

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