Bond quote Face value ($) Time to maturity (years) Annual coupon payments (paid semi-annually) bond price ($) zero rate 100 0.5 0 98 4.0405% 100 1 0 97 ? 100 1.5 15 115 ? 100 2 20 ? 5.500% Using the Table above, find the appropriate zero rates for1 year find the appropriate zero rates for 1.5 year find the 2-year bond price find the par-yield for the 2-year-maturity bond *Note1: zero rate for the 6 month period is done for you. *Note 2: coupon payments given are yearly coupon payments, which these will be paid out semi-annually (i.e. every 6 months) When doing calculations in this course, use at least 6 decimal places for accurate answers.
Bond quote Face value ($) Time to maturity (years) Annual coupon payments (paid semi-annually) bond price ($) zero rate 100 0.5 0 98 4.0405% 100 1 0 97 ? 100 1.5 15 115 ? 100 2 20 ? 5.500% Using the Table above, find the appropriate zero rates for1 year find the appropriate zero rates for 1.5 year find the 2-year bond price find the par-yield for the 2-year-maturity bond *Note1: zero rate for the 6 month period is done for you. *Note 2: coupon payments given are yearly coupon payments, which these will be paid out semi-annually (i.e. every 6 months) When doing calculations in this course, use at least 6 decimal places for accurate answers.
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
Bond quote
Face value ($)
Time to maturity (years)
Annual coupon payments (paid semi-annually)
bond price ($)
zero rate
100
0.5
0
98
4.0405%
100
1
0
97
?
100
1.5
15
115
?
100
2
20
?
5.500%
Using the Table above,
find the appropriate zero rates for1 year
find the appropriate zero rates for 1.5 year
find the 2-year bond price
find the par-yield for the 2-year-maturity bond
*Note1: zero rate for the 6 month period is done for you.
*Note 2: coupon payments given are yearly coupon payments, which these will be paid out semi-annually (i.e. every 6 months)
When doing calculations in this course, use at least 6 decimal places for accurate answers.
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