Question: Which Of The Following Answer Is The Correct Formula To Calculate The Price Of A Fixed Rate Bond (Expiring In 2 Years, Yearly Coupon Rate 3%) Given The Following Informations About The Interest Rates: Interest Rate Swap 2 Years: 3%, Spread 1%.
Which of the following answer is the correct formula tocalculate the price of a fixed rate bond (Expiring in 2 years,Yearly coupon rate 3%) given the following informations about theinterest rates: interest rate swap 2 years: 3%, spread 1%.
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a. 3/(1 + 2%) + 103 / ((1 + 4%)^2) b. 3/((1+4%)^2)+100/((1 + 4%)^2) c. 103 / (1 + 3% + 1%)^2 d. 3/(1 + 3%) + ( 3 + 100)/((1 + 4%)^2)