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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Question
Use the following information to answer questions 16-17 Current 1-year spot rate = 5.5% the 1-year forward rate one year from now: 117.63%, the 1-year forward rate two years from now: 12 12.18% the 1-year forward rate three years from now: f3 15.5% 16. The value of a 4-year, 10% annual-pay, $1,000 par value bond would be closest to: A $844.55 B. $995.89 C. $1,009.16 D. $1,085 62 17. Using the annual compounding, the value of a 3- year, zero-coupon, $1,000 par value bond would be: A. $708 8. $785 C. $852 D. $948 B
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