The 1/2-, 1-, 1.5-, and 2-year spot rates are 0.025, 0.029, 0.031, and 0.035, respectively. A par $1,000 coupon bond matures in 2 years and has semiannual coupon payments of $35. What is the price of...


The 1/2-, 1-, 1.5-, and 2-year spot rates are 0.025, 0.029, 0.031, and 0.035, respectively. A par $1,000 coupon bond matures in 2 years and has semiannual coupon payments of $35. What is the price of this bond?


Par $1,000 zero-coupon bonds of maturities of 0.5-, 1-, 1.5-, and 2-years are selling at $980.39, $957.41, $923.18, and $888.489, respectively.


 (a) Find the 0.5-, 1-, 1.5-, and 2-year semiannual spot rates.


(b) A par $1,000 coupon bond has a maturity of 2 years. The semiannual coupon payment is $21. What is the price of this bond?



May 26, 2022
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