What price would you get for this purchase

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A Treasury security carries a fixed 3 percent annual coupon rate and matures in exactly two years. The Treasury is currently priced at $ 10,000 par value to yield 3 percent to maturity. Assume that you can buy the bond and strip the coupons and final principal payment and sell each of them as a zero coupon security. Given the following zero coupon rates, what price would you get for this purchase and subsequent sales?

Maturity 6- month 1- year 18- month 2- year

Zero coupon yield 2.2% 2.6% 2.9%   3.6%

Reference no: EM13887184

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