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
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
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) |
|
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)
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