Find the value of the zero-coupon bond as at 31 December and Andrews expected income for the financial year 20X3 from the bonds. You are welcome to learn a range of topics from accounting, economics, finance and more. We hope you like the work that has been done, and if you have any suggestions, your feedback is highly valuable.
What is a Zero Coupon Bond?
Let's connect! Business Toggle Dropdown Science. Join Discussions All Chapters in Finance. Taken individually, each of these payments is an obligation of the issuer, in this case, the Government of Canada.
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- What is Zero Coupon Bond?.
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This allows the components to be registered and traded as individual securities. Once a bond has been stripped, a trustee directs the appropriate amount of the interest or maturity payment to the security holders. The holder of a zero coupon receives the par amount of the particular term of the zero that she holds.
How to Calculate Yield to Maturity of a Zero-Coupon Bond
If we start on December 1, the first two payments are identical to a 6-month and 1-year T-Bill. The basic math is easy. What should an investor pay for the 1-year coupon? As a rough cut, forgetting the compounding of interest interest-on-interest and the conversion to semiannual yields, we know that 5. Export Citation Export to NoodleTools. Export to RefWorks. Export to EasyBib.
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Accounting for Zero-Coupon Bonds
Pay attention to names, capitalization, and dates. The Journal of Finance. Description: The Journal of Finance publishes leading research across all the major fields of financial research.
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Zero Coupon Bond Definition
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