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Interest rates are equal to 6% for every maturity. A 3-year bond with face value $800 offers an annual coupon rate of 8%. A 2-year
Interest rates are equal to 6% for every maturity. A 3-year bond with face value $800 offers an annual coupon rate of 8%. A 2-year bond with an annual coupon $60 sells at par.
What is the price of the 3-year coupon bond?
a.
$789
b.
$800
c.
$1053.5
d.
$885.5
e.
$842.8
f.
$1010.7
g.
$935.8
h.
$725.4
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