Assume the current treasury yield curve

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1. Suppose you need $2,000 for a new TV. If you can invest your money at 8%, how much would you need to invest today so that you could purchase the TV in 18 months?

2. Assume the current Treasury yield curve shows that the spot rates for six? months, one? year, and one and a half years are 1%?,1.1%?, and 1.3%?, all quoted as semiannually compounded APRs. What is the price of a ?$1,000par,4% coupon bond maturing in one and a half years? (the next coupon is exactly six months from? now)?

The price of this bond is ?$....?(Round to the nearest? cent.)

Reference no: EM131967573

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