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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 398 Weeks Ago, 5 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
TodayAc€?cs zero-rate curve is summarised in the table below.
| Time period (years) | Zero rate %pa |
| 0.5 | 5.755 |
| 1.0 | 6.250 |
| 1.5 | 6.455 |
| 2 | 6.555 |
| 2.5 | 6.600 |
| 3 | 6.610 |
Calculate the price (per $100 par value), to three decimal places, of a three-year fixed-coupon
bond paying a coupon rate of 9% pa if the bond pays coupons every half year. Assume that the
bond is default-free and that a coupon has just been paid -- that is, price the bond on an ex-interest
basis.
Hint: find the bond price as the present value of its future cash flows, using the discount
factors retrieved from the zero-rate curve that we discussed in class.
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