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Please see below the current term structure of interest rates which is presented in terms of the vield to maturity (YTM) of the on-the-run Treasury
Please see below the current term structure of interest rates which is presented in terms of the vield to maturity (YTM) of the on-the-run Treasury securities and the spot rates Maturity (Year YTM (95 Spot rate (96) 0.5 6.000 6.000 10 6.500 6.500 1.5 6.750 6.765 2.0 6.900 6.919 2.5 7.000 7.023 3.0 7.080 7.107 3.5 7.150 7.181 7.220 7.257 7.250 7.288 - 50 7.260 7.296 What is the theoretical value of a bond with a 6% coupon rate and a maturity of 2 years? $98.3100 $98.3452 $98.3410 $100.0000 There is no possibility of arbitrage if the bond is selling at a price of $100. True False
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