Ask Question
18 September, 17:59

The zero coupon bonds of Mark Enterprises have a market price of $394.47, a face value of $1,000, and a yield to maturity of 6.87 percent based on semiannual compounding. How many years is it until this bond matures?

+5
Answers (1)
  1. 18 September, 18:50
    0
    7 years to matures the bond

    Explanation:

    F=face value=1000

    P=market price=bond price=394.47

    r=yield to maturity=6.87%=semi annually, yearly = 6.87*2=13.74 %

    T = years of maturity=?

    Formula = YTD = (Face value/Bond price) ∧1/T-1

    .1374 = (1000/394.47) ∧1/T-1

    1+0.1374=2.535∧1/T

    1.1374=2.535∧1/T

    1.1374=[ (1.1374∧7) ]∧1/T

    1=7/T

    T=7 years.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The zero coupon bonds of Mark Enterprises have a market price of $394.47, a face value of $1,000, and a yield to maturity of 6.87 percent ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers