Question
An investor considers the purchase of a 2-year bond with a 5% coupon rate, with interest paid annually and par of 100. The spot rates
An investor considers the purchase of a 2-year bond with a 5% coupon rate, with interest paid annually and par of 100. The spot rates observed in the market today are as follows: 1-yr spot is 3%, the 2-yr spot is 4% and the 3-yr spot is 5%. The clean price of the bond is closest to: a. 101.93. b. 102.85. c. 105.81. d. 102.36. e. 103.10.
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart
6th Edition
125991965X, 978-1259919657
