Question

The following is a list of prices for zero-coupon bonds of various maturities. a. Calculate the yield to maturity for a bond with a maturity of () one year; (ii) two years; (iii) three years; (iv) four years. (Do not round intermediate calculations. Round your answers to two decimal places.) YTM Maturity (Years) Price of Bond $ 983.40 $ 918.47 867.62 $ 774.16 b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. (Do not round intermediate calculations. Round your answers to two decimal places.) Maturity (years) AWNE Price of Bond $ 983. 40 918. 47 867.62 774. 16 Forward Rate Maturity (Years) Price of Bond $ 918.47 3 $ 867.62 4 $ 774.16

Answer 1

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BOND - Microsoft Excel (Product Activation Failed) Add-Ins File Home Insert Page Layout Formulas Data Review View - 2x % Cut Calibri Dr General Wrap Text Merge Merge & Center - Center BI U SF $ % % , 4:0 .00 :.: Insert Delete Format Conditional Format Formatting as Table Styles Cell Styles -11AA = = = D- DA Font fev IE IF Σ AutoSum : A Fill Sort & 2 Clear Filter Editing Find & Select Alignment Number Cells ID IG IH L I KILIMIN 10 IP Q E Copy Paste Format Painter Clipboard IL209 IC 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 answer 2 FORWARD RATES PRICE MATURITY OF BOND 983.4 918.47 867.62 774.16 answer 1 YTM 1.69% (1000/1F200)-1 4.34% (1000/1F201)^(1/2)) - 1 4.85% ((1000/1F202)^(1/3)) - 1 6.61% (1000/1F203)^(1/4)) -1 wn 7.07% ((1+1H201)^2/(1+IH200)^1)-1 5.86% ((1+1H202)^3/(1+IH201)^2)- 1 12.07% ((1+1H203)^4/(1+IH202)^3)- 1 211 212 213 N Sheet2 AFN BANKING NOTE 51 53 CLEAN PRICE 510 BIDDING, UNDERWRITING EUAC AW LIFELP, IP, MRP, INFLATION WARRANT refund Y IELD SPOT 1 ferences 54 55 I 56 BOU 120% Rea L. R ENGUTAS 25-11-2019