Zero-Coupon Bond Pricing Example If an investor wanted to make 5% imputed interest on a zero-coupon bond with a face value of $15,000 that matures in four years, how much would they be willing to pay?

For example, if a zero-coupon bond with a $20,000 face value and a 20-year term pays 5.5% interest, the interest rate is knocked off the purchase price, and the bond might sell for $7,000.

For example, you might pay $5,000 for a zero-coupon bond with a face value of $10,000 and receive the full price, $10,000, upon maturity in 20 or 30 years. Zero-coupon CDs work the same way.

So, for instance, if you spent $750 on a 10-year $1,000 zero coupon bond, then the fact that the bond was priced to yield around 3% would mean that you'd have to pay tax on 3% of its value each ...

For a zero coupon bond, the convexity is super high anyway, increasing as the square of the maturity. For example, a cousin of this bond is the German bund maturing on August 15, 2029 which has a ...

When the bond matures, you get your $10,000 principal back. With a zero-coupon bond, you collect no interest payments, but the amount you lend is less than the amount you’ll receive at maturity.

How to Use BEY in Comparing Fixed-Income Investments The bond equivalent yield in the example above would be 3.07%. If an investor wanted to buy this discounted bond as-is, 3.07% would be the ...

RPT - Ghana zero-coupon bond sparks pricing debate Repeats for wider distribution By Sudip Roy LONDON, Mar 29 (IFR) - Ghana has begun marketing a four-tranche US dollar bond with a big premium ...

Zero-coupon bonds live in the investing weeds, easily ignored by ordinary investors seeking growth for college and retirement. Should ordinary investors take a look? How do they tend to do in ...

Zero-coupon bonds live in the investing weeds, easily ignored by ordinary investors seeking growth for college and retirement. Even fixed-income investors may pass them by, because they don't ...

This is a preview. Log in through your library . Abstract Traditionally, we teach bond valuation using a yield to maturity (YTM) approach, which discounts all bond flows at the YTM. The correct ...

PIMCO 25 Year Zero Coupon U.S. Treasury Index ETF (ZROZ) surged 19.4% in a month, outperforming the SPDR S&P 500 ETF Trust's 9.9% gain. ZROZ's rally is attributed to its investment in long ...