please show how to do 5. What is the duration of a two-year zero coupon bond...

Question

Question

please show how to do

business finance

Answer 1

Answer #1

Duration i sthe period in which initialinvestment is recovered.

Duration of Zero Coupon Bond is Maturity period. Thus in the given case Duration is 2 years.

option A is correct.

Pls comment, if any further assistance is required.

Answer 2

Similar Homework Help Questions

please show how to do What is the Macaulay's duration of a bond witha par value...

please show how to do What is the Macaulay's duration of a bond witha par value of $10,000 that has a coupon rate of 6.5 percent annually and a final maturity of two years? Assume that the required rate of return is 4 percent compounded semiannually. 4. a. 1.949 years b. 1.910 years 1.876 years d. 1.713 years I C.
S07-09 Zero Coupon Bonds [LO2) You find a zero coupon bond with a par value of...

S07-09 Zero Coupon Bonds [LO2) You find a zero coupon bond with a par value of $10,000 and 17 years to maturity. If the yield to maturity on this bond is 4.2 percent, what is the price of the bond? Assume semiannual compounding periods. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Bond price
You find a zero coupon bond with a par value of $10,000 and 13 years to...

You find a zero coupon bond with a par value of $10,000 and 13 years to maturity. If the yield to maturity on this bond is 4.5 percent, what is the dollar price of the bond? Assume semiannual compounding periods.

A 20-year, zero-coupon bond was recently being quoted at 29.853% of par. Find the current yield...

A 20-year, zero-coupon bond was recently being quoted at 29.853% of par. Find the current yield and the promised yield of this issue, given that the bond has a par value of $1,000. Then, using semiannual compounding, determine how much an investor would have to pay for this bond if it were priced to yield 8.230%. The current yield on this bond is %. (Round to the nearest whole percent.) The promised yield of this issue is %. (Round to...
You find a zero coupon bond with a par value of $10,000 and 25 years to...

You find a zero coupon bond with a par value of $10,000 and 25 years to maturity. The yield to maturity on this bond is 4.7 percent. Assume semiannual compounding periods. What is the price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price
You find a zero coupon bond with a par value of $10,000 and 21 years to...

You find a zero coupon bond with a par value of $10,000 and 21 years to maturity. The yield to maturity on this bond is 4.3 percent. Assume semiannual compounding periods. What is the price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price $

MC algo 6-30 Zero Coupon Bond YTM There is a zero coupon bond that sells for...

MC algo 6-30 Zero Coupon Bond YTM There is a zero coupon bond that sells for $4,481.74 and has a par value of $10,000. If the bond has 21 years to maturity, what is the yield to maturity? Assume semiannual compounding. Multiple Choice 0 3.76% 0 3.70% 3.70% o 3.73% 3.86% 3.90%
1. You find a zero coupon bond with a par value of $5,000 and 19 years...

1. You find a zero coupon bond with a par value of $5,000 and 19 years to maturity. If the yield to maturity on this bond is 5.1 percent, what is the price of the bond? Assume semiannual compounding periods. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 2. You buy a zero coupon bond at the beginning of the year that has a face value of $1,000, a YTM of 10 percent,...
There is a zero coupon bond that sells for $4,419.64 and has a par value of...

There is a zero coupon bond that sells for $4,419.64 and has a par value of $10,000. If the bond has 22 years to maturity, what is the yield to maturity? Assume semiannual compounding.

There is a zero coupon bond that sells for $4,456.90 and has a par value of...

There is a zero coupon bond that sells for $4,456.90 and has a par value of $10,000. If the bond has 23 years to maturity, what is the yield to maturity? Assume semiannual compounding. a.3.4% b.3.46% c.3.43% d.3.54%