Examples 112
What is the market price of a US Treasury bond that has a coupon rate of 9% p.a., a face value of $1000 and matures exactly 2 years from today if the interest rate is 10% p.a. compounded semi-annually?
What is the market price of a US Treasury bond that has a coupon rate of 9% p.a., a face value of $1000 and matures exactly 10 years from today if the interest rate is 10% p.a. compounded semi-annually?
What is the market price of a consol bond that has a coupon rate of 9% p.a. if the interest rate is 10% p.a. compounded semi-annually?
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(
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i
i
Ann
where
Ann
i
c
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Multi-period deterministic cash flows: FI securities - Valuation