Problem: Assume that all of the bonds listed in the following table are the same except for their pattern of promised cash flows over time. Prices are quoted per $1 of face value. Use the information in the table and the Law of One Price to infer the values of the missing entries. Assume that the coupon payments are annual.
|
coupon rate
|
maturity
|
price
|
yield to maturity
|
|
6%
|
2 years
|
|
5.50%
|
|
0
|
2 years
|
|
|
|
7%
|
2 years
|
|
|
|
0
|
1 year
|
$0.95
|
|