Given n1-year par rate = 4% n2-year par rate = 5.2% n3-year par rate = 6.4% nSuppose the bond price is K1, 1 - Compute the 1-year, 2-year and 3-year spot rates using bootstrapping process. 2 - Compute the 1-year forward rates, starting from today, 1 year from now and 2-year from now
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
Given
n1-year par rate = 4%
n2-year par rate = 5.2%
n3-year par rate = 6.4%
nSuppose the
1 - Compute the 1-year, 2-year and 3-year spot rates using bootstrapping process.
2 - Compute the 1-year forward rates, starting from today, 1 year from now and 2-year from now
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