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Compute what should the price of bond be

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Reference no: EM132678915

Problem 1: You have a treasury bond that pays $100$100 one year from today and $1,100 two years from today. You notice that the yield-to-maturity on a one year-zero coupon treasury bond is 1% and the yield-to-maturity on a two year-zero coupon treasury bond is 2%. What should the price of your bond be?

Option 1: 1,156.30

Option 2: 1,246.37

Option 3: 1,177.44

Option 4: 1,223.46

Reference no: EM132678915

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