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A STRIPS traded on March 31, 2020, matures in 18 years on April 1, 2038. Assuming...

A STRIPS traded on March 31, 2020, matures in 18 years on April 1, 2038. Assuming a yield to maturity of 4.2 percent, what is the STRIPS price?

STRIPS price
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Answer #1

Face Value of STRIPS = $100

Calculating the Price of STRIPS:-

where, YTM = Yield to maturity = 2

n = no of years = 19

Price = $47.32

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