Consider the following information about zero coupon bonds. Each spot rate is expressed as an annual...

Consider the following information about zero coupon bonds. Each spot rate is expressed as an annual percentage rate (APR), compounded semi-annually.

Bond	Maturity	Price	Face Value	Spot Rate(APR)
a	1 year	?	$1000	9.66%
b	2 year	$856	$1000	?

a) Calculate the price of bond A and the annual spot rate (APR) of bond B

b) Calculate the price of a two-year level coupon bond (bond C) with an annual 5% coupon rate (annual payments)

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jeff jeffy answered 1 year ago

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