Assume the current Treasury yield curve shows that the spot rates for six months, one year, and one and a half years are 1.0%, 1.1%, and 1.3%, all quoted as semiannually compounded APRs. What is the price of a $1,000 par, 4.25% coupon bon maturing in one and a half years (the next coupon is exactly six months from now)?
Assume the current Treasury yield curve shows that the spot rates for six months, one year, and one and a half years are 1.0%, 1.1%, and 1.3%, all quoted as semiannually compounded APRs. What is the price of a $1,000 par, 4.25% coupon bon maturing in one and a half years (the next coupon is exactly six months from now)?
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 4P
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