Consider a bond with a coupon rate of 6% that pays annual interest and matures in three
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Question:
Consider a bond with a coupon rate of 6% that pays annual interest and matures in three years. The face value of the bond is $1,000. The benchmark spot rate curve is as follows: S1 = 3%, S2 = 4%, and S3 = 5%. Assume the bond has the same liquidity and risk as the benchmark spot rates. The yield to maturity of the bond is closest to:
Group of answer choices
4.92%
2.25%
3.58%
1.94%
Related Book For
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright
Posted Date: