Question
A U.S. Government 2-year T-Note has a face value of $1,000 and pays annual coupons of $50. The first coupon is due in one year.
A U.S. Government 2-year T-Note has a face value of $1,000 and pays annual coupons of $50.
The first coupon is due in one year. What is the correct price for the coupon bond today? Use the term structure of interest rates shown below. (Round to the nearest cent.)
| Term | Spot Rate |
|
| 1-year | 6.0% | |
| 2-years | 9.0% |
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Handbook Of Financial Risk Management
Authors: Thierry Roncalli
1st Edition
1138501875, 978-1138501874
