Question
A 10-year maturity mortgage-backed bond is issued. The bond is a zero coupon bond that promises to pay $10,000 (par) after 10 years. At issue,
A 10-year maturity mortgage-backed bond is issued. The bond is a zero coupon bond that promises to pay $10,000 (par) after 10 years. At issue, bond market investors require a 15 percent interest rate on the bond. What is the initial price on the bond?
Answer is $2252; please show in excel
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Recent Advances In Computational Finance
Authors: Nikolaos S. Thomaidis, Jr. Dash, Gordon H.
1st Edition
1626181233, 978-1626181236
