Respuesta :
$53.39 is the price of a treasury strips with a face value of $100 that matures in 8 years and has a yield to maturity of 8.0 percent. Price = $100 / (1 + .080/2)^2(8) = $53.39.
What is treasury strips?
U.S. bonds known as Treasury STRIPS are offered at a discount to face value and are fully repaid when they mature. STRIPS are treasury bonds that trade as separate securities for the principal and coupon payments. Holders of STRIPS only receive the ultimate payout on the maturity date instead of any coupon payments.
Although technically issued by securities dealers rather than the US government, STRIPS are given the same backing as other Treasury securities including Treasury bills, notes, and bonds because the Federal Reserve supervises their production.
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