Question

Fill in the table below for the following zero-coupon bonds, all of which have par values of \(1,000

Price	Maturity (years)	Yield to Maturity
\)400	20	?
\(500	20	?
\)500	10	?
?	10	10%
?	10	8%
$400	?	8%

Short answer

Price	Maturity (years)	Maturity - Half Years	Semi-annual Yield to Maturity	Bond Equivalent YTM
$400	20	40	2.32%	4.64%
$500	20	40	1.75%	3.50%
$500	10	20	3.53%	7.06%
$376.89	10	20	5%	10.00%
$456.39	10	20	4%	8.00%
$400	11.68	23.36	4%	8.00%

Step-by-step solution

Known information

It is to be noted that the convention is to use semi-annual periods.

The formulae for the Price of a zero coupon bond = Face Value / (1+ semi-annual YTM) T and

The formulae for Bond equivalent YTM = Semi-annual YTM x 2

Calculation of price, maturity years, YTM and Bond equivalent YTM

Price	Maturity (years)	Maturity - Half Years	Semi-annual Yield to Maturity	Bond Equivalent YTM
$400	20	40	2.32%	4.64%
$500	20	40	1.75%	3.50%
$500	10	20	3.53%	7.06%
$376.89	10	20	5%	10.00%
$456.39	10	20	4%	8.00%
$400	11.68	23.36	4%	8.00%