Question
Find the price of a 3 year bond paying an annual coupon of 13%. Assume a face value of $1,000 and assume the zero-coupon year
Find the price of a 3 year bond paying an annual coupon of 13%. Assume a face value of $1,000 and assume the zero-coupon year curve is as follows: ( All rates are expressed in annual compounding in this question)
| Maturity | Rate |
|---|---|
| 1 year | 8.8% |
| 2 year | 9.9% |
| 3 year | 11.5% |
Step by Step Solution
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Step: 1
To find the price of a 3year bond paying an annual coupon of 13 we need to calculate the present value of the bonds cash flows which include the annua...
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Principles Of Finance
Authors: Julie Dahlquist, Rainford Knight
1st Edition
979-8439388899
