A U.S. Government T-Note with a 3-year maturity has a coupon rate of 5% and a face value of $1,000. The coupons are paid annually and the next coupon is due in one year. Using the Treasury spot rates given in the table below, what is the price of the coupon bond? (Round to nearest cent.)
Treasury Spot Rates |
||
Term |
Rate |
|
t=1 |
9.55% |
|
t=2 |
5.42% |
|
t=3 |
3.78% |
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
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