Maturity 1 2 3 5 YTM 0.260% 0.600% 0.860% 1.130% All yields are par yield. Ie coupon rate same as ytm and bond priced at par of 100. Find 4-year yield using avg of 3Y and 5Y yield; Find discount factor for 1y, 2y, 3y, 4y, and 5y zero coupon bond. Find spot rates for all years
Maturity 1 2 3 5 YTM 0.260% 0.600% 0.860% 1.130% All yields are par yield. Ie coupon rate same as ytm and bond priced at par of 100. Find 4-year yield using avg of 3Y and 5Y yield; Find discount factor for 1y, 2y, 3y, 4y, and 5y zero coupon bond. Find spot rates for all years
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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Maturity 1 2 3 5
YTM 0.260% 0.600% 0.860% 1.130%
YTM 0.260% 0.600% 0.860% 1.130%
All yields are par yield. Ie coupon rate same as ytm and bond priced at par of 100.
Find 4-year yield using avg of 3Y and 5Y yield;
Find discount factor for 1y, 2y, 3y, 4y, and 5y zero coupon bond.
Find spot rates for all years
Find forward rate for all years.
Price the following cash flows:
i. 5 year 6% coupon bond;
ii. 5 year 0.5% coupon bond.
What are the YTMs for both bonds in part 2a?
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