What is the price of a Treasury STRIPS with a face value of $100 that matures in
ID: 2710182 • Letter: W
Question
What is the price of a Treasury STRIPS with a face value of $100 that matures in 7 years and has a yield to maturity of 12.5 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
What is the price of a Treasury STRIPS with a face value of $100 that matures in 7 years and has a yield to maturity of 12.5 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Explanation / Answer
Face value (FV) $ 100 Coupon rate 0.00% Number of compounding periods per year 2 Interest per period (PMT) $ - Number of years to maturity 7 Number of compounding periods till maturity (NPER) 14 Market rate of return/Required rate of return 12.50% Market rate of return/Required rate of return per period (RATE) 6.25% Bond price PV(RATE,NPER,PMT,FV) Bond price $ 42.80 PV(6.25%,14,0,100)*-1
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