The Federal Government 2-year coupon bond has a face value of $1,000 and pays annual coupons of $33.The next coupon is due in one year.Currently,the one and two-year spot rates on Federal Government zero coupon bonds are 4% and 4.5%.What is the correct price for the coupon bond at time zero (immediately) ?
A) $977.68
B) $1,000.00
C) $976.17
D) $1,025.00
E) $1,023.49
Correct Answer:
Verified
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