Question
The zero rates with continuous compounding are as follows: 6 months at 3.0%; 12 months at 3.2%; and 18 months at 3.5%. If the bond
The zero rates with continuous compounding are as follows: 6 months at 3.0%; 12 months at 3.2%; and 18 months at 3.5%. If the bond pays interest semiannually, what is the price of a $100 par value, 18-month 12% coupon bond based on these zero rates?
| A. | $118 | |
| B. | $124 | |
| C. | $112 | |
| D. | $108 |
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
3rd Edition
0073382426, 9780073382425
