Revision as of 18:53, 19 November 2023 by Admin (Created page with "'''Solution: B.''' Using spot rates, the value of the bond is: 60 /1.07 + 60 /1.08<sup>3</sup> + 1060 /1.09<sup>3</sup> = 926.03. {{soacopyright | 2023 }}")
Exercise
Nov 19'23
You are given the following information with respect to a bond:
You are also given that the one, two, and three year annual spot interest rates are 7%, 8%, and 9% respectively.
Calculate the value of the bond.