Question

The current​ zero-coupon yield curve for​ risk-free bonds is as​ follows: LOADING.... What is the price per face value of a​ two-year, zero-coupon,​ risk-free bond?

Answer 1

$89.86

Step-by-step explanation:

Calculation for the face value of a two year, zero-coupon risk-free bond

Using this formula

P=FV/(1+YTM)^n

Where,

FV represent the face value of $100

YTM represent the Yield to Maturity=5.49%

n represent the number of maturity year= 2 years

Let plug in the formula

P=100/(1+0.0549)^2

P=100/(1.0549)^2

P=100/1.11281401

P=$89.86

Therefore the price of a​ two-year, zero-coupon,​ risk-free bond will be $89.86