Bonds, for a federal treasury bill, were issued with a facevalue of $250,000 and a coupon rate of 0.20% per quarter, andpayments are quarterly. This bond is bought in the bond marketbefore maturation, and there are only 16 payments remaining. Thenext payment is due after three months (one quarter), which youcollect if you buy this bond now. How much are you ready to pay forthis bond today if the next interest payment is due today? As aninvestor, you wish to earn 1.6% compounded daily.
Hints: Find quarterly effective interest rate for thisinvestor.
Coupon rate can be used to calculate recurrent revenues fromthis bond which will be coupon rate x face value.
