Reading 67: Introduction to the Valuation of Fixed Income

答案和详解如下：

11．If the required rate of return is 12 percent, what is the value of a zero coupon bond with a face value of $1,000 that matures in 20 years? Assume an annual compounding period.

A)   $103.67.

B)   $99.33.

C)   $175.30.

D)   $202.67.

The correct answer was A)

I = 12
PMT = 0
FV = 1,000
N = 20
PV = ?
PV = 103.67

12．A Treasury bill has a $10,000 face value and matures in one year. If the current yield to maturity on similar Treasury bills is 4.1 percent annually, what would an investor be willing to pay now for the T-bill?

A)   $9,799.12.

B)   $9,899.05.

C)   $9,606.15.

D)   $9,732.91.

The correct answer was C)

The investor would pay the present value of the $10,000 one year away at a discount rate of 4.1%. To value the T-bill, enter FV=$10,000, N=1, PMT=0, I/Y=4.1%. The value of the T-bill is then PV = –$9,606.15.

13．The value of a 10-year zero-coupon bond with a $1,000 maturity value, compounded semiannually, and has an 8 percent discount rate is closest to:

A)   $463.19.

B)   $1,000.00.

C)   $456.39.

D)   $200.00.

The correct answer was C)

V = (maturity value)/(1 + i)^{number of years x 2} = $1,000/(1.04)^{10 x 2} = $1,000/2.1911 = $456.39

or

n = 20, i = 4, FV = 1,000, compute PV = 456.39.