Confusing bond questions...
When doing bond questions, I am always confused whether to set PV=0 or not, for example:
A firm has $3 million in outstanding 10year bonds, with a fixed rate of 8 percent (assume annual payments). The bonds trade at a price of $92 per $100 par in the open market.
To calculate the required return, you do this: PV 92, N10, FV100, PMT 8 compute I/Y
…………………………………………
Now, if we look at this question:
An investor purchases a $1,000 par value accrual bond with a 3year maturity. The bond pays 5% interest compounded semiannually at the bonds maturity. Calculate the amount that will be received on maturity.
The answer is 1[2nd][N], 6[N], 2.5[I/Y], 25[PMT], 0[PV], [CPT][FV] = 159.69
So PV is set as 0 here…I don’t know what’s the difference? I thought the investor put down money today in both situations?
Thanks for answering! |
发表于 2013-4-13 23:36
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