Given the following spot rates, calculate the value of a 3-year, 4% annual-coupon bond. Spot rates:   1-year: 1% 2-year: 3% 3-year: 9%     A. $880.38 B. $914.47 C. $961.28 D. $993.88

Essentials Of Investments
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Chapter1: Investments: Background And Issues
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Given the following spot rates, calculate the value of a 3-year, 4% annual-coupon bond.

Spot rates:

 

  • 1-year: 1%
  • 2-year: 3%
  • 3-year: 9%

 


 

A.

$880.38

B.

$914.47

C.

$961.28

D.

$993.88

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