The YTM on a six-month Treasury STRIP is 5.6%, and the YTM on a one-year...
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The YTM on a six-month Treasury STRIP is 5.6%, and the YTM on a one-year Treasury STRIP is 7.6%. All YTMs are quoted as APRs with semiannual compounding. Given this information, what would be the price of a one-year coupon bond with a coupon rate of 6.1%, semi-annual payments and a face value of $1000?
Answer: $986.10. Please show how to arrive at this answer.
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