Zero coupon treasury bonds are currently selling

Assignment Help Financial Management
Reference no: EM13934513

The U.S. 5-years zero coupon Treasury bonds are currently selling at $791,031.15. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000,000. What annualized interest rate would you earn if you bought this bond at the current market price?

Reference no: EM13934513

Questions Cloud

General ledger accounts related to inventory : Place Y (Yes) beside the general ledger accounts related to inventory in a job order cost system and N (No) by those that are not.
What is the ionization state of each residue at ph5.2 : The active site of lysozyme contains two amino acid residues essential for catalysis: Glu35 and Asp52. The pka values of the carboxyl side chains of these low residues are 5.9 and 4.5 respectively. What is the ionization state (protonated or deprot..
What is the maximum profit and loss for position : An investor purchases a stock for $45 and a put option for $.85 with a strike price of $41. The investor also sells a call option for $.85 with a strike price of $54. What is the maximum profit and loss for this position?
Static methods for processing an array of marks : For this task you will create a class containing a number of static methods for processing an array of marks, which are scores in a test. Each mark is an integer in the range 0 to 100 inclusive. On the Interact site for this subject, you will be p..
Zero coupon treasury bonds are currently selling : The U.S. 5-years zero coupon Treasury bonds are currently selling at $791,031.15. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000,000. What annualized interest rate would you earn if you ..
find the minimum and maximum values in s : Given an array s =(s[1], s[2], . . . , s[n]), and n = 2^d for some d = 1. We want to find the minimum and maximum values in s. We do this by comparing elements of s.
What property of water gives rise to capillary action : The antibiotic, polymyxin B, attaches itself to the phospholipids in the bilayers of bacterial cells and increases the permeability of the membrane. What is a likely result that this antibiotic will have on bacterial cells?
Would it be the availability of credit : What is tipping theory? how would you apply it to any part of our economy? Most important, where does it start? For instance, if you apply the theory to the auto industry, then what would tip new car purchases? Would it be the availability of credit?..
Communication and interpersonal skills in clinical practice : Write a reflective essay on student development in practice and at the university. ‘A reflection, Relating to ...... Communication and interpersonal skills in clinical practice.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the accounting break-even quantity

A project has the following estimated data: price = $64 per unit; variable costs = $42 per unit; fixed costs = $15,000; required return = 15 percent; initial investment = $28,000; life = four years. Ignoring the effect of taxes, what is the accountin..

  Delivery of advice and financial products to individuals

What part of finance is concerned with design and delivery of advice and financial products to individuals, business and government?

  About the firms marginal and average tax rates

Suppose a firm earns $12,000,000 in taxable income. Which of the following is correct about the firm’s marginal and average tax rates?

  What is the annual interest amount for the bond

James McCulloch purchased a 20-year U.S. Treasury bond four years ago for $8,500. The bond paid 3.500 percent annual interest. Four years later he sold the bond for $8,580. What is the annual interest amount for the bond? What is the total interest M..

  Bonds for some much-needed expansion projects

BDJ Co. wants to issue new 25-year bonds for some much-needed expansion projects. The company currently has 7.8 percent coupon bonds on the market that sell for $1,125, make semi-annual payments, and mature in 25 years. Required: What coupon rate sho..

  Call option using the black scholes option pricing model

You are given the following information. S=50, X=59, simple annual risk free interest rate is 5%, standard deviation of monthly stock returns is 10%. What is the value of a one year European call option using the black scholes option pricing model? A..

  Calculate the value of the buffelhead american put

Buffelhead's stock price is $221 and could halve or double in each six-month period (equivalent to a standard deviation of 97%). Assume that you own an American put option on Buffelhead stock with an exercise price of $221. Calculate the value of the..

  What is the projects MIRR and IRR

A project has an initial cost of $41,125, expected net cash inflows of $12,000 per year for 9 years, and a cost of capital of 14%. What is the project's NPV?

  Deal provides credit enhancement for debt deals series

The GECAS deal provides credit enhancement for the debt deal's Series B Term Loan tranche by

  Calculated with the same annual effective interest rate

Tracy receives payments of $X at the end of each year for n years. The present value of her annuity is 493. Gary receives payments on $3X at the end of each year for 2n years. The present value of his annuity is $2,748. Both present values of calcula..

  How much will the bank earn over the next year

A bank borrows money at the 5 year CD rate found in the paper with daily compounding. It loans money at the 15 year mortgage rate in the paper which is compounded monthly. If the bank borrows $10,000,000 from depositors and loans the $10,000,000 out ..

  Determine the investors after-tax rate of return

An investor bought a racehorse for $1 million. The horse's average winnings were $700,000 per year, and expenses averaged $200,000 per year. The horse was retired after three years, at which time it was sold to a breeder for $175,000. Assume accelera..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd