You have a 1-year zero coupon bond that pays $1 at maturity. The price today is $0.971. You have a two-year zero-coupon bond that pays $1 at maturity. Its price is $0.907. What is the term structure of interest rates?
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Cell reference -
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You have a 1-year zero coupon bond that pays $1 at maturity. The price today is...
3. You have a zero coupon bond that pays $100 in two more years. Its price is $69.44. You also have a 5% coupon bond with a principal of $100. The spot rate for 1 year is 5%. (a) What is the spot rate for 2 years, ra? (b) What is the price of the coupon bond? (c) Make a graph to show the term structure of interest rates.
3. You have a zero coupon bond that pays $100 in two more years. Its price is $69.44. You also have a 5% coupon bond with a principal of $100. The spot rate for 1 year is r = 5%. (a) What is the spot rate for 2 years, ra? (b) What is the price of the coupon bond? (c) Make a graph to show the term structure of interest rates. 4. Compute the yield to maturity for the two...
1. You have a bond that pays a $3 coupon in 1 year and a $3 coupon in two years and a $3 coupon in three years. It matures in three years with principal repayment of $100 (paid at the same time as the final coupon). Suppose 1-year, 2-year, and 3-year zero coupon bond prices are 0.99, 0.97, and 0.92, respectively. Which is closest to the fair market price of the bond that you have? $96.00 $98.00 $100.00 $102.00 $104.00...
You have a 10% coupon bond with a principal of $100 and maturity 3 years. Compute the price of the bond if you know that the term structure of interest rates if flat for the coming 3 years.
Zero-coupon bonds: a. A ten-year, zero coupon bond trades at a Yield-to-Maturity (YTM) of 3.5%. Assume you buy $1000 worth of the bond today. How much will it be worth 10 years from now at maturity? b. A 5-year, zero coupon bond trades at a Yield-to-Maturity (YTM) of 2.5%. Assume you buy $1000 worth of the bond today. How much will it be worth 5 years from now at maturity? C. Assume you invest $1,131.41 today and receive $1,410.60 five...
Question 1 What is the price of a zero-coupon 21-year maturity bond per face (par) value of $1,000 if the annual market rates for these bonds are 8%? Question 2 What is the price of a 17-year bond paying 8.8% annual coupons with a face (par) value of $1,000 if the market rates for these bonds are 6.8%? Question 3 What is the price of a 14-year bond paying an annual coupon rate of 9.4%, but paying it semiannually, per...
1a. Calculate the price of a bond where the coupon rate is 5% (pays annually), the market interest rate is 4%, and the life of the bond is 10 years. 1b. Suppose that you have an annual pay 7-year bond with a price of $1,100, paying a 4.5% coupon, with a face value of $1,000. What is the bond’s yield to maturity (YTM)? 1c. A bond sells for $900 today. Its coupon rate is 3%. The expected price in one...
Consider a 2-year coupon bond that pays coupon annually with a coupon rate of 3%, face value $1000, a yield to maturity of 4%. (a) What is the approximated bond price estimated by both duration and convexity if the yield is increased by 0.5%? (b) Suppose you purchased 1 unit of the above coupon bond mentioned above and is worried if the interest rate will increase. You are considering taking short position on a zero coupon bond. The zero coupon...
6. (20 points) Suppose months, maturity in 12 months, and maturity in 18 months. Suppose the 6 month bond is a zero-coupon bond and has a theoretical price of $101. Suppose the 1 year bond pays a coupon every 6 months at an annual rate of $6, and has a theoretical price of $97. Suppose the 18 month bond pays a coupon every 6 months, at an annual rate of $8 and has a theoretical price of $96. The face...
-What is the yield to call of a 30-year to maturity bond that pays a coupon rate of 11.98 percent per year, has a $1,000 par value, and is currently priced at $918? The bond can be called back in 7 years at a call price $1,089. Assume annual coupon payments. -Marco Chip, Inc. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 17 years and a yield to maturity of 10.23 percent,...