Problem: Hilo Inc. of Des Moines Iowa has floated some zero coupon bonds to finance it's capital expenditures. The Par Value of each bond is $1000.
a. Assuming a market price of $300 with a maturity of 30 years, determine and discuss the bonds yield to maturity.
b. Assuming a market price of $300 and a yield to maturity of 8%, determine and discuss the holding period.
c. Assuming a holding period of 10 years and a yield to maturity of 10%, determine and discuss the bonds current market price.