Mary is considering buying a four-year bond with coupon rate of 5%, face value $100 and annual coupons. What is the price of the four-year bond if according to the zero-coupon yield curve (assume all rates are EARS), the one-year spot rate is 4.3% the two-year spot rate is 3.6% the three-year spot rate is 3.4% the four-year spot rate is 3.0% Answer in $ and include two decimal places.

Mary is considering buying a four-year bond with coupon rate of 5%, face value $100 and annual coupons. What is the price of the four-year bond if according to the zero-coupon yield curve (assume all rates are EARS), the one-year spot rate is 4.3% the two-year spot rate is 3.6% the three-year spot rate is 3.4% the four-year spot rate is 3.0% Answer in $ and include two decimal places.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 4P

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