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Suppose you are given the following information about the coupon rates and yield-to-maturities (YTMs) of four default-risk free bonds: Maturity (years) 1 2 3 4
Suppose you are given the following information about the coupon rates and yield-to-maturities (YTMs) of four default-risk free bonds:
Maturity (years) | 1 | 2 | 3 | 4 |
Coupon rate | 0.00% | 8.00% | 6.00% | 12.00% |
YTM | 2.000% | 3.908% | 5.840% | 5.783% |
If you assume that coupons are paid, and interest is compounded, annually, then what is the price of a 4% coupon bond with four years to maturity and a face value of $100 closest to?
Group of answer choices
$93.36
$81.04
$88.73
$96.89
$75.70
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