All rates are annual. The one-year zero coupon rate is 3%. The two year zero-coupon rate...
All rates are annual. The one-year zero coupon rate is 3%. The two year zero-coupon rate is 4%. The price of a two-year 3% coupon bond with the face value of $1,000 is $ ………{A}……… (accuracy to one cent).
Homework Answers
| FV | $ 1,000 | ||
| PMT | $ 30 | (1000 x 3%) | |
| NPER | 2 | ||
| Rate | 4% | (Yield of zero coupon rate) | |
| PV | ($981.14) | ||
| =PV(4%,2,30,1000) | |||
| So price of 2 year bond should be $981.14 to yield a 4% rate | |||
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All rates are annual. The one-year zero coupon rate is 3%. The
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