Assume that the six-month Treasury spot rate is 1.6% APR, and the one-year rate is 2% APR,

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Assume that the six-month Treasury spot rate is 1.6% APR, and the one-year rate is 2% APR, both compounded semiannually. What is the price of a one-year $1000 par Treasury bond with 2% coupons?

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Fundamentals Of Corporate Finance

ISBN: 9780133507676

3rd Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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Question Posted: Oct 25, 2016 11:04 AM

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Assume that the six-month Treasury spot rate is 1.6% APR, and the one-year rate is 2% APR,

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Two percent coupon means 2 of 1000 or 20 paid out in sixmonth installments of 10 each The bond m...View the full answer

Fundamentals Of Corporate Finance

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