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Suppose that a two-year bond with a principal of $100 provides coupons at the rate of 6% per annum semiannually. Suppose that the zero-rates are
Suppose that a two-year bond with a principal of $100 provides coupons at the rate of 6% per annum semiannually. Suppose that the zero-rates are
| Maturity (years) | Zero Rate (%) |
| 0.5 | 5.0 |
| 1.0 | 5.8 |
| 1.5 | 6.4 |
| 2.0 | 6.8 |
What is the current theoretical price of the bond?
- please use formulas and explain step by step
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