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You are given the following information with respect to a bond: (1) Par value: 1000 (2) Term to maturity: 3 years (3) Annual coupon

You are given the following information with respect to a bond: (1) Par value: 1000 (2) Term to maturity: 3 years (3) Annual coupon rate 8% payable annually You are also given that the one, two, and three year annual spot interest rates are 2%, 5%, and 6% respectively. Calculate the value of the bond.

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Heres how to calculate the value of the bond 1 We can use the bond valuation formula Bond Value Pres... blur-text-image

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