Treasury spot rates are as follows in today's market: Maturity (years) Spot rate 1 2.2% 4+ decimals 2 2.8% 3 3.7% One year ago, a 3-year Treasury note ($1,000 face value, 5.2% coupon rate and pays annual coupon) was issued. This security paid out its first coupon yesterday. Based on the spot rates in the table, this security should be fairly priced TODAY at $1,046.35. (hints: is this coupon bond still a 3-yr bond as of TODAY?) muusimm However, the bond is traded at $1,042.85 in the market today, what is the YTM?

Treasury spot rates are as follows in today's market: Maturity (years) Spot rate 1 2.2% 4+ decimals 2 2.8% 3 3.7% One year ago, a 3-year Treasury note ($1,000 face value, 5.2% coupon rate and pays annual coupon) was issued. This security paid out its first coupon yesterday. Based on the spot rates in the table, this security should be fairly priced TODAY at $1,046.35. (hints: is this coupon bond still a 3-yr bond as of TODAY?) muusimm However, the bond is traded at $1,042.85 in the market today, what is the YTM?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

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