Question
What is the fair price of a 5-year government bond with a 8% coupon rate and a face value of $1000? The spot rates in
What is the fair price of a 5-year government bond with a 8% coupon rate and a face value of $1000? The spot rates in this economy are as follows:
1-year 8.50%
2-year 9.00%
3-year 9.50%
4-year 9.75%
5-year 10.00%
Cashflows/Coupons are paid annually.
947.74
1004.12
1004.44
927.74
872.59
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
2nd Edition
0471111864, 978-0471111863
