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ki77a [65]
4 years ago
9

The current​ zero-coupon yield curve for​ risk-free bonds is as​ follows: Maturity ​(years) 1 2 3 4 5 YTM 4.99 % 5.53 % 5.73 % 5

.95 % 6.06 % What is the price per $ 100 face value of a​ four-year, zero-coupon,​ risk-free bond?
Business
1 answer:
Doss [256]4 years ago
3 0

Answer:

$79.36

Explanation:

The computation of the price per dollar is shown below:

Price per dollar = Face value ÷ (1 + yield to maturity)^number of years

                          = $100 ÷ (1 + 5.95%)^4

                          = $100 ÷ 1.2600966129

                          = $79.36

We simply applied the above formula so that the price per dollar could come  

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