Friday, January 15, 2010

Zero Coupon Bond Price Can You Compute The Price Of A 5-year Zero Coupon Bond From 2 5 Year Coupon Bonds?

Can you compute the price of a 5-year zero coupon bond from 2 5 year coupon bonds? - zero coupon bond price

Zero-coupon bond is a precursor of bonds at a discount. A loan of Rs.100 for 5 years with a discount of Rs.50 issued.
This investment means Rs.50 and Rs.10 each year ineterst income. But the only thing that all payments are for 5 years or at maturity.

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