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1)Suppose you purchase a zero coupon bond with a face value of ?$1,000?, maturing in 20 ?years, for ?$215

#### 1)Suppose you purchase a zero coupon bond with a face value of ?$1,000?, maturing in 20 ?years, for ?$215

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**1)Suppose you purchase a zero coupon bond with a face value of ?$1,000?, maturing in 20 ?years, for ?$215.75. Zero coupon bonds pay the investor the face value on the maturity date.**

What is the implicit interest in the first year of the? bond's life? ?(Round to the nearest? cent.)

**2.What is the percentage change in price for a zero coupon bond if the yield changes from 7?% to 8.5?%? The bond has a face value of ?$1,000 and it matures in 10 years. Use the price determined from the first? yield, 7?%, as the base in the percentage calculation.**

The percentage change in the bond price if the yield changes from 7?% to 8.5?% is ? ?(Round to two decimal? places.)

**3.Beam Inc. bonds are trading today for a price of ?$626.64. The bond currently has 18 years until maturity and has a yield to maturity of 9.37?%. The bond pays annual coupons and the next coupon is due in one year.**

What is the coupon rate of the? bond?? (Round to one decimal? place.)

**4.Cyberdyne Systems is issuing a series of zero coupon bonds to raise? $500M to fund research and development at its Skynet division. Each bond will have a face value of ?$1,000 and will mature in 29 years. The yield on the bond is 5.5?%.**

What is the fair price for one of? Cyberdyne's zero coupon? bonds? ?(Round to the nearest? cent.)

**5.Beam Inc. bonds are trading today for a price of ?$934.06. The bond pays annual coupons with a coupon rate of 3?% and the next coupon is due in one year. The bond has a yield to maturity of 3.69?%.**

How many years are there until the bond? matures? (Round to the nearest whole? number.)