The spot rates for a zero coupon bond are as follows: 1 year 5% 2 year 5.5% 3 year 6% What is the value of the bond today, its face value is $1000, and pays annual coupons with a rate of 6%

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
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The spot rates for a zero coupon bond are as follows:

1 year 5%

2 year 5.5%

3 year 6%

What is the value of the bond today, its face value is $1000, and pays annual coupons with a rate of 6%

 

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