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b-4.5.40%, two-year bond b-il. 5.40%, five-year bond b-il. 10 40%, five-year bond Present Value $ 992.84

b-4.5.40%, two-year bond b-il. 5.40%, five-year bond b-il. 10 40%, five-year bond Present Value $ 992.84

Essentials Of Investments
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
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You have estimated spot rates as follows: 71=5.40%, r₂ = 5.80%, r3=6.10%, 74 - 6.30%, r5 = 6.40%. a. What are the discount factors for each date (.e, the present value of $1 paid in year ? b. Calculate the PV of the following $1,000 bonds assuming annual coupons and maturity of (1) 5.4%, two-year bond: (2) 5.4%, five- year bond; and (3) 10.4%, five-year bond. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the PV of the following $1,000 bords assuming annual coupons and maturity of: (1) 5.4%, two-year bond; (ii) 5.4%, five-year bond; and (iii) 10.4 %, five-year bond. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. b-4. 5.40%, two-year bond b-il. 5.40%, five-year bond b-iii. 10.40%, five-year bond Present Value $ 992 84
Transcribed Image Text:You have estimated spot rates as follows: 71=5.40%, r₂ = 5.80%, r3=6.10%, 74 - 6.30%, r5 = 6.40%. a. What are the discount factors for each date (.e, the present value of $1 paid in year ? b. Calculate the PV of the following $1,000 bonds assuming annual coupons and maturity of (1) 5.4%, two-year bond: (2) 5.4%, five- year bond; and (3) 10.4%, five-year bond. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the PV of the following $1,000 bords assuming annual coupons and maturity of: (1) 5.4%, two-year bond; (ii) 5.4%, five-year bond; and (iii) 10.4 %, five-year bond. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. b-4. 5.40%, two-year bond b-il. 5.40%, five-year bond b-iii. 10.40%, five-year bond Present Value $ 992 84
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