Consider a $5000-face-value Newfoundland & Labrador Hydro strip bond from the issue in Table 8.3 that matures

Question:

Consider a $5000-face-value Newfoundland & Labrador Hydro strip bond from the issue in Table 8.3 that matures on August 27, 2018. If the yield does not change as years go by, what is the bond's value on

a. August 27, 2015?

b. August 27, 2016?

c. August 27, 2017?

Table 8.3

Issuer Maturity date Price quotation date Price ($) Yield (%) Nova Scotia Power Corp. Newfoundland & Labrador Hydro Hydro Quebec Nova Scotia Power Corp. August 26, 2016 August 27, 2018 August 26, 2020 February 26, 2021 February 26, 2016 February 27, 2016 February 26, 2016 February 26, 2016 99.71 0.59