The yield to maturity for a 20.00 year STRIPS is 5.60%. If par value is $1,000. then it should sell for $_______.
selling price of STRIPS bond = par value * 1 /(1+r)^n
here,
r = 5.60%
=>0.056
n=20 year.
=>$1,000* 1/(1.056)^20
=>$336.30.
The yield to maturity for a 20.00 year STRIPS is 5.60%. If par value is $1,000....
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