Question
Today is 1 July 2021, William plans topurchase a corporate bond with a coupon rate of j 2 = 4.31% p.a. and face valueof 100.
Today is 1 July 2021, William plans topurchase a corporate bond with a coupon rate of j2 = 4.31% p.a. and face valueof 100. This corporate bond matures at par. The maturitydate is 1 January 2024. The yield rate is assumed to be j2 = 3.89% p.a. Assumethat this corporate bond has a 8.5% chance of default in any six-month periodduring the term of the bond. Assume also that, if default occurs, William willreceive no further payments at all. Calculate the purchase price for 1 unit ofthis corporate bond. Round your answer to three decimal places.
a.100.127
b.66.129
c.61.288
d.101.780
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