6. The prices of 1, 2, 3, and 4-year zero coupon government bonds are 95.42, 90.36, 85.16, and 78.81, respectively. What is the continuously compounded 3-year zero rate? A. 6.40% B. 6.12% C. 5.07% D. 5.35%
6. The prices of 1, 2, 3, and 4-year zero coupon government bonds are 95.42, 90.36, 85.16, and 78.81, respectively. What is the continuously compounded 3-year zero rate? A. 6.40% B. 6.12% C. 5.07% D. 5.35%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Q6:
Q7:
![6. The prices of 1, 2, 3, and 4-year zero coupon government bonds are 95.42, 90.36, 85.16, and
78.81, respectively. What is the continuously compounded 3-year zero rate?
A. 6.40%
B. 6.12%
C. 5.07%
D. 5.35%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9ec55b99-92e0-4fba-b261-58af73634e16%2F7d9c721b-a595-4a41-a843-2c0b6293e8d8%2Fvnw6jt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:6. The prices of 1, 2, 3, and 4-year zero coupon government bonds are 95.42, 90.36, 85.16, and
78.81, respectively. What is the continuously compounded 3-year zero rate?
A. 6.40%
B. 6.12%
C. 5.07%
D. 5.35%
![Finance Department
7. On November 1, 2020 a trader took a long position in three futures contracts on a commodity
that expires on March 31", 2021. The initial futures price is $60. On December 31, 2020 the
futures price is $61. On Feb 28, 2021 it is $64. The contract is closed out on February 28, 2021
What gain is recognized in the accounting year from January 1 to December 31, 2020? Each
contract is on 1000 units of the commodity and the transaction qualities to be considered as a
hedge.
A. $0
B. $3,000
C. $9,000
D. $12,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9ec55b99-92e0-4fba-b261-58af73634e16%2F7d9c721b-a595-4a41-a843-2c0b6293e8d8%2Ffs9ufm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Finance Department
7. On November 1, 2020 a trader took a long position in three futures contracts on a commodity
that expires on March 31", 2021. The initial futures price is $60. On December 31, 2020 the
futures price is $61. On Feb 28, 2021 it is $64. The contract is closed out on February 28, 2021
What gain is recognized in the accounting year from January 1 to December 31, 2020? Each
contract is on 1000 units of the commodity and the transaction qualities to be considered as a
hedge.
A. $0
B. $3,000
C. $9,000
D. $12,000
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