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QUESTION
The YTM on a 30 year zero coupon bond is 4.35%. What is the present value of a zero coupon bond portfolio that pays $100,000, 30 years later?
The YTM on a 30 year zero coupon bond is 4.35%. What is the present value of a zero coupon bond portfolio that pays $100,000, 30 years later?
YTM on 30 year bond I = 4.35%Future value to be paid after 30 years = $ 100000Period of investment n = 30 yearsPresent Value PV = FV / (1+i)^nPresent Value PV = $ 100000/(1.0435)^30 = $ 27875.74