A $1 face value bond pays an 8 percent semiannual coupon. The annual yield is 6%. The bond has 10 years remaining until maturity, and its price is $1.1488. Consider a futures contract calling for delivery of this bond only. The contract expires in 18 months. The risk-free rate is 5 percent. compute the future price.
Why can’t I key in N=8.5, I/Y=3, pmt=4, and FV=100 to get the answer? I know the other method. |