Question
The Federal Government 2year coupon bond has a face value of $1,000 and pays annual coupons of $33. The next coupon is due in one
The Federal Government 2year coupon bond has a face value of $1,000 and pays annual coupons of $33. The next coupon is due in one year. Currently, the one and twoyear spot rates on Federal Government zero coupon bonds are 4% and 4.5%. What is the correct price for the coupon bond at time zero (immediately)?
A.$976.17
B.$1,023.49
C.$977.68
D.$1,000.00
E.$1,025.00
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Money Talks Explaining How Money Really Works
Authors: Nina Bandelj ,Frederick F. Wherry ,Viviana A. Zelizer
1st Edition
0691202893, 978-0691202891
