
Explanation:
The price is calculated as $15(0.992556) + $15(0.982240) + $1,015(0.967713) = $1,011.85.
(Book 4, Module 56.2, LO 56.b)
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Use the following information to answer the next two questions.
| Maturity (Years) | STRIP Price | Spot Rate | Forward Rate |
|---|---|---|---|
| 0.5 | 99.2556 | 1.50% | 1.50% |
| 1.0 | 98.2240 | 1.80% | 2.10% |
| 1.5 | 96.7713 | 2.20% | ? |
| 2.0 | 95.1524 | ? | 3.40% |
Question 42 of 100
The price of a $1,000 par value Treasury bond (T-bond) with a 3% coupon that matures in 1.5 years is closest to:
A
$1,010.02.
B
$1,011.85.
C
$1,013.68.
D
$1,015.51.
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