Assuming the market is arbitrage-free, if a six-month pure discount bond yields 1.9%, a one-year pure discount bond yields 2.3%, an eighteen-month pure dis- count bond yields 2.65%, and a two-year discount bond yields 3.05%, what should be the price of a two-year $1,000 6% par-value bond with semiannual coupons?

Answer rating: 100% (QA)

To determine the price of a twoyear 1000 6 parvalue bond with semiannual coupons we need to ca... View the full answer