You are given the following data on US Treasury. The maturity date is May 15, 2041. The asked yield-to-maturity is 2.128%. The c

Question

2 years ago

13

oupon rate is 2.35%. You agree to buy the bond June 21, 2021. Assume T 2. Par is $1,000. What is the clean (flat) price

1 answer:

babunello [35] · Answer 1 · 2022-05-04T02:56:58+03:00

Answer:

$1,035.84

Explanation:

Number of years to maturity (Nper) = 20

Annual Coupon payment (PMT) = 1000*2.35% =$23.50

Payment at maturity (FV) = $1000

Yield to maturity (Rate) = 2.13%

<em>Using the MsExcel Present value function</em>

Clean(flat) price = PV(Nper, PMT, FV, Rate)

Clean(flat) price = PV(20, 23.50, 1000, 2.13%)

Clean(flat) price = 1035.8436

Clean(flat) price = $1,035.84