A corporate bond off ers a 5% coupon rate and has exactly 3 years remaining to maturity.
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A corporate bond off ers a 5% coupon rate and has exactly 3 years remaining to maturity.
Interest is paid annually. Th e following rates are from the benchmark spot curve:
Time-to-Maturity Spot Rate 1 year 4.86%
2 years 4.95%
3 years 5.65%
Th e bond is currently trading at a Z-spread of 234 bps. Th e value of the bond is closest to:
A . 92.38.
B . 98.35.
C . 106.56.
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Related Book For 
Fixed Income Analysis
ISBN: 9788126563128
3rd Edition
Authors: Barbara S. Petitt, Jerald E. Pinto, Wendy L. Pirie, Bob Kopprasch
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