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Homework answers / question archive / The current zero-coupon yield curve for risk-free bonds is as follows: Maturity 1 2 3 4 5 YTM 4
The current zero-coupon yield curve for risk-free bonds is as follows:
Maturity 1 2 3 4 5
YTM 4.96% 5.48% 5.71% 5.91% 6.09%
The price per $100 face value of a four year, zero-coupon, risk free bond is $__ (Round to the nearest cent)
Computation of the price of the bond:-
FV = PV*(1+rate)^n
$100 = PV*(1+5.91%)^4
PV = $100 / 1.2582
= $79.48 or $79