UMUC FINC 330 Homework 4 Solutions
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FINC 330 Homework 4 Answers (UMUC)
1. Marco Chip, Inc. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 12 years and a yield to maturity of 7.58 percent, compounded semi-annually. What is the current price of the bond?
2. Black Water Corp. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 24 years and a yield to maturity of 11.25 percent, compounded annually. What is the current price of the bond?
3. 6 years ago, Mini Max Inc. issued 30 year to maturity zero-coupon bonds with a par value of $1,000. Now the bond has a yield to maturity of 11.87 percent, compounded semi-annually. What is the current price of the bond?
4. 22 years ago, Blue Lake Corp. issued 30 year to maturity zero-coupon bonds with a par value of $5,000. The current interest rate on this type of bond is 9.91 percent, compounded annually. What is the current price of the bond?
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