Use information from Table 15.5.

a. What is the price of a bond that pays one unit of the S&P index in 2 years?
b. What quarterly dollar coupon is required if the bond is to sell at par?
c. What quarterly payment of fractional units of the S&P index is required if the bond is to sell at par?

Transcribed Image Text:

TABLE 15.5 Table for problems. Quarter 6 Oil forward price () 210 2. 208 20.5 20. 20.0 19.9 19.8 Zero-coupon bond 0.9852 0.970 0.9546 0.9388 023 0.9075 0.8919 0.8763 price (S)