A Zero-Coupon Bond to 3-Years (1096 days) quotes with a zero-coupon rate of 2.25% Act/365. Its price should be: A) 94.255 B) 93.591 C) 93.537 D) 93.450

Answer 1

Price = Face Value / (1 + (Yield / 100))^(Days to Maturity / 365)

In this case, the face value is assumed to be 100.

Let's calculate the price using the given data:

Price = 100 / (1 + (2.25 / 100))^(1096 / 365) Price = 100 / (1 + 0.0225)^(3) Price = 100 / (1.0225)^(3) Price ≈ 93.591 (rounded to three decimal places)

Therefore, the correct answer is B) 93.591.