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Calculate the price of second zero coupon bond

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Problem - Cindy will make a 2-year investment using two consecutive 1-year $500,000 Zero coupon pond. The maturity proceeds of the first zero coupon bond will be rolled over into the second zero coupon bond. The purchase yields for the two 'Lyear zero coupon bond will be 2.38% and 4.3396 p.a., respectively. Note that any surplus funds after one year can be invested for one year at a rate of 3.36% p.a. Calculate the price of second zero coupon bond.

Reference no: EM133044313

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