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Please use the information in the following table to calculate the price of a 2-year, 5% coupon Treasury bond. You MUST SHOW YOUR WORK to
Please use the information in the following table to calculate the price of a 2-year, 5% coupon Treasury bond. You MUST SHOW YOUR WORK to earn points on this question (Hint: It is incorrect to use TVM solver for this question.) YTM Price Zt Maturity Coupon (years) Rate 0.5 0 Theoretical Spot Rate 0.0800 $96.15 0.08000 21=0.0400 Z2=0.0415 1.0 0 0.0830 92.19 0.08300 1.5 0.0850 0.0890 99.45 0.08930 Z3=0.04465 0.09247 Z4=0.04624 2.0 0.0900 0.0920 99.64 2.5 0.1100 0.0940 103.49 0.09468 Z5=0.04734 3.0 0.0950 0.0970 99.49 0.09787 Z6=0.04894 3.5 0.1000 0.1000 100.00 0.10129 27=0.05065 4.0 0.1000 0.1040 98.72 0.10592 Z8=0.05296 O $92.447 $100.880 O $96.290 0 $90.317
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