Entries by Hannah Wangui

We see the following yield curve for discount, or zero-coupon, bonds. Maturity Yield to Maturity 1 year 6% 2 years 7% 3 years 8% What is the implied forward rate between year 2 and year 3?

November 21, 2020 in /by

 We see the following yield curve for discount, or zero-coupon, bonds. Maturity Yield to Maturity 1 year 6% 2 years 7% 3 years 8% What is the implied forward rate between year 2 and year 3?   Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code “Newclient”

 

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A four-year coupon bond with annual coupon rate of 5% is currently selling at a yield to maturity of 6%.

November 21, 2020 in /by

A four-year coupon bond with annual coupon rate of 5% is currently selling at a yield to maturity of 6%. (a) Calculate the modified duration of this bond. (b) What is the predicted dollar price change of this bond using modified duration, assuming that its yield to maturity decreases by 0.5%?   Looking for a […]

 

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A one-year zero-coupon bond with a face value of $100 sells for $99.46, a two-year zero-coupon bond sells for $97.23, and a 3-year zero-coupon bond sells for $90.50

November 21, 2020 in /by

A one-year zero-coupon bond with a face value of $100 sells for $99.46, a two-year zero-coupon bond sells for $97.23, and a 3-year zero-coupon bond sells for $90.50. Suppose a new coupon paying bond, making annual coupon payments, is issued today with a face value $100, maturity of 3 years, and an annual coupon payment […]

 

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Suppose that the term structure is currently flat so that bonds of all maturities have yields to maturity of 10%. Currently a 5 year coupon bond with annual coupons (with the first one due in 1 year) and face value of $1,000 is selling at par.

November 21, 2020 in /by

Suppose that the term structure is currently flat so that bonds of all maturities have yields to maturity of 10%. Currently a 5 year coupon bond with annual coupons (with the first one due in 1 year) and face value of $1,000 is selling at par. A year from now interest rates will be depend […]

 

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