ACC 420 – You invest in a zero coupon bond for Games Inc.

ACC 420 – You invest in a zero coupon bond for Games Inc.

Subject: Business    / Finance
Question

You invest in a zero coupon bond for Games Inc. where you will receive par ($1,000) 5 years from now. Assuming an implied yield of 7.5%, what was your initial investment?

You invest in a zero coupon bond for XYZ Inc. where you will receive par ($1,000) 8 years from now. Assuming an initial investment of $650, what is your yield to maturity?