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Determine the interest payment for the following three bonds: 5.5 percent coupon corporate bond (paid semi-annually), 6.45 percent coupon Treasury note, and a corporate zero coupon bond maturing in 10 years. (Assume a $1,000 par value.)a. $27.50, $32.25, $0, respectivelyb. $55.00, $64.50, $0, respectivelyc. $5.50, $6.45, $0, respectivelyd. $27.50, $32.25, $100, respectively

Sagot :

Par value ranges from $27.50 to $32.25 and 0 to $0.A debt security that doesn't pay interest is called a zero-coupon bond.

A corporate zero-coupon bond: what is it?

  • A debt security that doesn't pay interest is called a zero-coupon bond. Zero-coupon bonds offer full face value (par) gains at maturity and trade at significant discounts. An investor's return is calculated as the difference between a zero-coupon bond's purchase price and par value.
  • The Long-term, the the the gtghtghtgtreg gtg gt In order to maximize your profit from any given rate shift, zero coupon bonds are your best option if you want to wager on interest rates moving in a specific direction.

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