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

Question

3 years ago

9

.95 % 6.06 % What is the price per $ 100 face value of a four-year, zero-coupon, risk-free bond?

1 answer:

Doss [256] · Answer 1 · 2022-03-11T02:02:51+03:00

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

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