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Assume an efficient capital market. Consider three bonds at t=0. The nominal (par) value of each bond is 1,000. The three bonds have no default
Assume an efficient capital market. Consider three bonds at t=0. The nominal (par) value of each bond is 1,000. The three bonds have no default risk. Bond A is a pure discount (zero coupon) bond. Bond B and C are (level) coupon bonds. The 3- year spot rate (r3) is 4%. Furthermore, the following figures are given: Bond A B Maturity 1 year 2 years 3 years Coupon Rate 0% 3% 4% Price 990.10 1,010.05 ? Question: Calculate the price of Bond C. Round your answer to the nearest whole euro amount (i.e. O decimals). DO NOT provide the euro-sign in your
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