Given the following information, what did you pay for the bond in question? Par = $100...
Given the following information, what did you pay for the bond in question? Par = $100 Coupon Rate = 0% Return = 10% Maturity = Exactly 1 year from purchase *
Homework Answers
since coupon is 0% it is a zero coupon bond.
price of zero coupon bond = face value / (1+r)^n
here,
face value $100
r =10%
n =1 year
=>$100 / (1.10)^1
=>$90.91.
amount paid for the bond will be $90.91.
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