a) What is the price of a 3-year zero-coupon US government real bond with the (real) face value of $1,000 issued on January 24, 2011, on its issuance day (discount rate for that day is 0.308099985122681)?

 

b) Suppose you buy a real bond from part a) on January 24, 2011, and hold it for exactly 1 year until January 24, 2012 (discount rate for that day is 0.628700017929077) and then sold it. How many dollars did you make or lose from this investment?

Answer rating: 100% (QA)

a On the issuance day January 24 2011 the price of the 3year zerocoupo... View the full answer