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This is a six year bond. Coupons are paid once a year. The principal is 120. The coupon rate is 5%. The discount rate is
This is a six year bond. Coupons are paid once a year. The principal is 120. The coupon rate is 5%. The discount rate is 6%. In your answer provide a brief definition of a bond using the above numerical information and the rationale for your calculations (and equation). Show all work. A) Obtain the price (today) of the bond assuming it is a straight bond (up to two decimal places) B) Obtain the price (today) of the bond assuming it is a zero coupon bond (up to twodecimal places).
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