Question
Asked Oct 14, 2019
Smooth Sailing Warehouse wants to issue 15-year, zero coupon bonds that yield 7.50% with semi-annual compounding. What price should it charge for these bonds if the face value is $1,000?
 
Group of answer choices
$331.40
$337.97
$362.14
$369.94
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Expert Answer

Step 1

Calculate the bond pri...

Face value
Bond price
Number of periodas
Yield
1+
$1,000
15 2
0.075
1+
$1,000
(1.0375)0
= S331.403307490636 or S331.40|
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Face value Bond price Number of periodas Yield 1+ $1,000 15 2 0.075 1+ $1,000 (1.0375)0 = S331.403307490636 or S331.40|

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