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A 3-year bond offers a 10% coupon rate with interest paid annually. Assuming the following sequence of spot rates, the price of the bond is
A 3-year bond offers a 10% coupon rate with interest paid annually. Assuming the following sequence of spot rates, the price of the bond is closest to: Time to maturity Spot Rates 1 year 8.0% 2 years 9.0% 3 years 9.5%
A. 96.98
B. 101.46
C. 102.95
D. None of the above.
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