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Use the following information to answer. Coupon Payments are annual unless otherwise indicated! Years Face Coupon Market Security Rating Maturity Value Rate Price Treasury 1

Use the following information to answer. Coupon Payments are annual unless otherwise indicated!

Years Face Coupon Market
Security Rating Maturity Value Rate Price
Treasury 1 $ 1,000 0.00% $ 965.00
Treasury 3 $ 1,000 1.90% $ 939.06
Treasury 5 $ 1,000 4.30% $ 932.42
Treasury 10 $ 1,000 6.80% $ 1,007.12
Treasury 15 $ 1,000 6.60% $ 908.25
Corp A A 5 $ 1,000 8.10% $ 990.00
Corp B BB 10 $ 1,000 7.90% $ 859.88
Corp C AA 15 $ 1,000 7.00% $ 660.00

What should be the price of a 3 year A rated bond that pays no coupon, if the bond is in equilibrium to the market?

Multiple Choice

  • $956.66

  • $917.12

  • none of the above

  • $826.62

  • $912.44

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