What would be the annual cash flow received from the bond


Problem

At the time of issuance of a zero-coupon bond with a $10,000 face value, prevailing market rates were 6%. Accordingly the bond was sold with a yield of 6%. One year later, market rates had declined to 5%. For an investor who purchased the bond one year after issuance, what would be the annual cash flow received from the bond?

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: What would be the annual cash flow received from the bond
Reference No:- TGS03316004

Expected delivery within 24 Hours