Calculating Zero RatesSuppose the prices for T-bills/bonds are as follows:Time (years)0.511.5 (8% coupon)94.842 (10% coupon)97.12The coupons on the 2 bonds are paid semiannually.Price ($, face value = 100)94.089.035363738What is the 6-month zero rate? (continuously compounded, enter as a %, at least 2decimal places)Type your answer...What is the 12-month zero rate? (continuously compounded, enter as a %, at least2 decimal places)Type your answer...What is the 18-month zero rate? (continuously compounded, enter as a %, at least2 decimal places)Type your answer...What is the 24-month zero rate? (continuously compounded, enter as a %, at least2 decimal places)Type your answer...

Pricing of a bond/T-bills The price of a bond/T-bills is equal to the present value of all…

Calculating Zero Rates Suppose the prices for T-bills/bonds are as follows: Time (years) 0.5 1 Price ($, face value = 100) 94.0 89.0 1.5 (8% coupon) 94.84 2 (10% coupon) 97.12 The coupons on the 2 bonds are paid semiannually. 35 What is the 6-month zero rate? (continuously compounded, enter as a %, at least 2 decimal places) Type your answer... 36 What is the 12-month zero rate? (continuously compounded, enter as a %, at least 2 decimal places) Type your answer... 37 What is the 18-month zero rate? (continuously compounded, enter as a %, at least 2 decimal places)

Calculating Zero Rates Suppose the prices for T-bills/bonds are as follows: Time (years) 0.5 1 Price ($, face value = 100) 94.0 89.0 1.5 (8% coupon) 94.84 2 (10% coupon) 97.12 The coupons on the 2 bonds are paid semiannually. 35 What is the 6-month zero rate? (continuously compounded, enter as a %, at least 2 decimal places) Type your answer... 36 What is the 12-month zero rate? (continuously compounded, enter as a %, at least 2 decimal places) Type your answer... 37 What is the 18-month zero rate? (continuously compounded, enter as a %, at least 2 decimal places)

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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Similar questions

Zero-Coupon Bonds (ZCBS) with maturity in 1 and 5 years are available on the market. Their redemption value is £100, and they sell for £90 (1-year ZCB) and £84 (5-year ZCB). Find the spot rates corresponding to the ZCBs' prices 数字 i1 = % i5 数字 Enter a percentage correct to 2 decimal places % Calculate the forward rate 1,5 i1,5 数字 Enter a percentage correct to 2 decimal places %
If the market rate of interest is 10%, a $10,000, 12%, 10-year bond that pays interest semiannually would sell at an amount ☐ a. equal to the face value b. greater than face value c. that cannot be determined d. less than face value
Use the following tables to calculate the present value of a $608,000 @ 6%, 6-year bond that pays $36,480 interest annually, if the market rate of interest is 7%. Round to the nearest dollar. Present Value of $1 ¦ Present Value of Annuity of $1 Periods 5 % 6 % 7 % 10 % ¦ Periods 5 % 6 % 7 % 10 % 1 .95238 .94340 .93458 .90909 ¦ 1 .95238 .94340 .93458 .90909 2 .90703 .89000 .87344 .82645 ¦ 2 1.85941 1.83339 1.80802 1.73554 3 .86384 .83962 .81630 .75131 ¦ 3 2.72325 2.67301 2.62432 2.48685 4 .82270 .79209 .76290 .68301 ¦ 4 3.54595 3.46511 3.38721 3.16987 5 .78353 .74726 .71299 .62092 ¦ 5 4.32948 4.21236 4.10020 3.79079 6 .74622 .70496 .66634 .56447 ¦ 6 5.07569 4.91732 4.76654 4.35526 7 .71068 .66506 .62275 .51316 ¦ 7 5.78637 5.58238 5.38929 4.86842 8 .67684 .62741 .58201 .46651 ¦ 8 6.46321…
Subject:finance
Find the interest payment for the following bond (par value for each is $1,000, semi-annual payments): a zero-coupon bond maturing in 10 years? (format answer as $1,234.56 there are zero cents such as $1,234.00)
What is the percentage change in a 5-year zero-coupon bond with a duration of 5 years, when interest rates increase from 9% to 10% ? Round to one decimal place as needed. A. -5% B. -4.7% C. -1% D. E. -4.5% - 5.1%
please answer
The stated rate is 5%; the market rate is 4%. The future value of Bonds payable is $1,000. When calculating the PV of the bonds what amount would you use as the annuity or annual payment? $40 $10 E $50 $90 $100
If the discount rate is 19%, what is the present value of 3500 USD received at the end of each year for 23 years? a) 12450.5 b) 10000.5 c) 17500 d) 25000 e) 18084.5 ================= What is the market value of Beril Gıda A.Ş.'s bond with a nominal value of USD 12,000, maturity of 5 years, with an annual interest payment of 25%, and the desired return rate of 24%? a) 10250 b) 12327 c) 5427 d) 20000 e) 17500 ================== 12000 USD over the 12% interest deposited in the bank at the end of each year, how many USD will it reach at the end of the 15th year? a) 234356.4 b) 375000 c) 634356.5 d) 447356.4 e) 250225.5
Dengar
An insurance company is analyzing the following three bonds, each with five years to maturity, annual interest payments, and is using duration as its measure of interest rate risk. What is the duration of each of the three bonds? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. $10,000 par value, coupon rate=9.7%, r 0.17 b. $10,000 par value, coupon rate 11.7%, r= 0.17 c. $10,000 par value, coupon rate = 13.7%, p=0.17 Duration of the bond years
A fixed-interest instrument is repaid at par in precisely eight years and pays coupons at a rate of four percent yearly in arrears.Determine the bond's DISCOUNTED MEAN TERM (DMT) (in years) at an effective interest rate of 6% annually. Correct answer= 6.9209 (using formulas, no tables)

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