You are currently working as a bond trader for JB Who Investment Bank. The Reserve Bank has just increased interest rates and a client is requesting a quote for the cash price of a particular bond. Your screen below displays the new zero interest rates with continuous compounding.

Maturity (months)	Zero rate (% pa)
3	12.10
6	12.70
9	13.10
12	13.20
15	13.30

The bond has a coupon rate of 12% pa paid quarterly and a face value of $100. The bond matures in 15 months. Using the rates above, calculate the bond price. Give your answer in dollars and cents to the nearest cent.

Answer rating: 100% (QA)

Bond Coupon pe... View the full answer