1) A zero coupon bond has a face value of $1000 and matures in 5. Investors require? a(n) 7.4% annual return on these bonds. What should be the selling price of the? bond?
2) A Ford Motor Co. coupon bond has a coupon rate of 7?%, and pays annual coupons. The next coupon is due tomorrow and the bond matures 26 years from tomorrow. The yield on the bond issue is 6.2?%. At what price should this bond trade? today, assuming a face value of 1,000??
3) What is the percentage change in price for a zero coupon bond if the yield changes from 6.5?% to 5.5?%? The bond has a face value of ?$1,000 and it matures in 10 years. Use the price determined from the first? yield, 6.5?%, as the base in the percentage calculation.