Discount Function LO 22.1
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Face (par) value
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$100.00
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Years to Maturity
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0.5
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1.0
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1.5
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2.0
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2.5
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Bond price (PV)
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$98.00
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$99.00
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$99.00
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$98.00
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$97.00
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Coupon rate
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0.00%
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4.00%
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5.00%
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5.00%
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5.00%
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Discount function
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0.9800
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0.9514
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0.9187
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0.8866
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0.8552
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Spot rates
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4.08%
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5.05%
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5.73%
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6.11%
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6.36%
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FV Cash flows
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Years
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0.5
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$100.00
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$2.00
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$2.50
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$2.50
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$2.50
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DF
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0.9800
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0.9800
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0.9800
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0.9800
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0.9800
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Years
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1.0
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$102.00
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$2.50
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$2.50
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$2.50
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DF
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0.9514
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0.9514
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0.9514
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0.9514
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Years
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1.5
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$102.50
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$2.50
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$2.50
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DF
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0.9187
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0.9187
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0.9187
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Years
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2.0
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$102.50
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$2.50
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DF
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0.8866
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0.8866
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Years
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2.5
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$102.50
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DF
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0.8552
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