Question
A US Government 2-year T-Note has a face value of $1,000 and pays annual coupons of $70. The first coupon is due in one year.
A US Government 2-year T-Note has a face value of $1,000 and pays annual coupons of $70. 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.
| Term | Spot Rate |
| 1-year | 5.5% |
| 2-years | 9.0% |
The correct price for the coupon bond today is $______.
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Finance For IT Decision Makers
Authors: Michael Blackstaff
3rd Edition
1780171226, 978-1780171227
