contestada

An investor purchases a zero coupon bond with 18 years to maturity at a price of $407.24. The bond has a par value of $1,000. What is the implicit interest for the first year?

Respuesta :

PHEN0MENAL1

Answer:

Implicit interest for the 1st year = (Redemption value of bond - Purchase price of bond) / Bond life or maturity period

= ($ 1,000 - $ 407.24) / 18

= $ 592.76 / 18

= $ 32.931 = $ 33 (approx.)

Explanation:

Refer to the answer.

Note - Redemption of zero coupon bond is always at par.

Otras preguntas