You are given the following information: The price of a one-year zero coupon bond with par value of $100 is $96.35. The second year 1-year forward rate is 7%. The second year 2-year forward is 9%. Calculate the price of a 3-year bond with par value of $100 and 5% annual coupons. (A) $93.0 (B) $94.5 (C) $96.5 (D) $97.5 (E) $99.0

You are given the following information: The price of a one-year zero coupon bond with par value of $100 is $96.35. The second year 1-year forward rate is 7%. The second year 2-year forward is 9%. Calculate the price of a 3-year bond with par value of $100 and 5% annual coupons. (A) $93.0 (B) $94.5 (C) $96.5 (D) $97.5 (E) $99.0

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 6FPE

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Pls show full steps. Thanks
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