CFA CFA Level 1 Deferred coupon bonds (help pls!!!)

Deferred coupon bonds (help pls!!!)

  • This topic has 2 replies, 2 voices, and was last updated Jan-18 by Renawxh.
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    • Renawxh
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      Hey guys! I have an enquiry wrt deferred coupon payments! I have tried a question before and it stated that for the first 2 years, the bond will not be paying any coupons and thereafter, pay coupons until the end of maturity where t=6. So will the first 2 coupon payment be paid together with the principal payment or do we just ignore?

    • RoyD
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      No you just ignore the first 2 years. But remember find the present value of coupon and princiapl for t=1 and discount it again once to get the PV. Basically this bond just pays 4 coupons and the principal.

    • Renawxh
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      @RoyD‌ hey thanks! (:

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