How much would you pay to buy

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Question - Suppose today on the market for Canadian government bonds, a 1-year discount bond costs $980.39, a 2-yr discount bond costs $953.68, a 3-yr discount bond costs $925.88, a 4-year discount bond costs $878.20 and a 5-year discount bond costs $821.91.

How much would you pay to buy a 5-year Canadian government bond that pays a coupon of $175 at the end of year one, $176 at the end of year two, $178 at the end of year 3, $177 at the end of year 4, and $202 at the end of year 5?

Reference no: EM132622078

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