[1-((1+y)+7)] BOND PRICE Calculate the price of a bond with a par value of $1,000 to be paid in 8 years, a coupon rate of 1.20% paid semi-annually, and a required annual yield of 2.10%. F 1000 maturity (years) 8 price = CX n ( # of coupon payments) y (1+y)" C (semi-annual) coupon payment y(semi-annual) Bond price Calculate the price of a zero coupon bond with face value 1,000, maturity in 8 years and spot yield of 2.10%. f maturity(years) spot yield 1000 8 Pn = (1 + Yn)" 1 Bond price which is worth more today, the coupon bond or the zero coupon bond? If the zero coupon bond actually cost $745 today, what is the spot yield? BOND YIELD Calculate the yield(to maturity) of a bond with a par value of $1,000 to be paid in 4 years, a coupon rate of 1.20% paid annually, and a price $850 price 850 coupon (annual) (1 + y F coupon payment (annual) price = CX y par val 1000 (1+y) n (years) + F-p C + Current yield yield(to maturity) goalseek approx YTM n Approx YTM= F+p 2 Is this bond par, premium, or discount. Give reasoning. This bond is