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Treasury spot interest rates are as follows: Maturity (years) 1 2 3 4 Spot rate 2.4% 2.8% 3.7% 4.5% Attempt 1 / 10 for 10
Treasury spot interest rates are as follows:
Maturity (years) | 1 | 2 | 3 | 4 |
Spot rate | 2.4% | 2.8% | 3.7% | 4.5% |
Attempt 1/10 for 10 pts.
Part 1
What is the price of a Treasury note with 2 years to maturity, a $1,000 face value, and a coupon rate of 4.6%, paid annually (in $)?
Correct
P=Coupon1+r1+Coupon+Par value(1+r2)2
= 461+0.024+1,046(1+0.028)2
= 1,034.72
Attempt 2/10 for 7.5 pts.
Part 2
What is the yield to maturity?
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