A bond with 4% coupon rate

Reference no: EM13308739

1. A bond with 4% coupon rate (paid annually), 10 years to maturity, and $1000 face value.

2. A bond with 4$ plus current (short) rate (paid annually), 10 years to maturity, and $1000 face value.

3. a bond with 8% minus current (short) rate (paid annually), 10 years to maturity, and $1000 face value.

The prices of the bonds are $700, 800, and 900 respectively.

a) Derive the price of a zero coupon with 10 years to maturity and 1000 face value

b) Derive the price of a floating rate bond (coupon paid annually) with 10 years to maturity and 1000 face value

Reference no: EM13308739

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