I cannot understand how face value is 20 and how it is being calculated help me
Homework Answers
There is a typo in the solution- It is -0.8 unit of Bond A and 1 unit of Bond B.
Face value=-0.8*Face value of Bond A+1*Face Value of Bond B=-100*0.8+100=20
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I cannot understand how face value is 20 and how it is
being calculated help me...
(20pts) 5. The term structure of interest rates for zero-coupon bonds with $100 face value is...
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Consider the following three bonds of $1,000 face value. 1 1% Bond Maturity (year) Coupon Rate A 0.5 3.50% B 1.0 | 0.00...
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pls help 4. Consider a bond of face value $1,000 with an annual coupon of 8.0%...
pls help
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Consider the following three zero-coupon (discount) bonds: Bond Face Value Time to Maturity Market Price 1...
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Consider the following three zero-coupon (discount) bonds: Face Value Market Pricee Time to Maturity Bond $924.64...
Consider the following three zero-coupon (discount) bonds: Face Value Market Pricee Time to Maturity Bond $924.64 One year $1,000 1e $841.53 Two years $1,000 2e $744.59 Three years $1,000 3 a) Calculate the one-, two-, and three-year spot rates. (3 marks) b) Calculate the forward rate over the second year and the forward rate over the third year. (2 marks)
(20pts) 5. The term structure of interest rates for zero-coupon bonds with $100 face value is shown below: Maturity 1 year 2 years 3 years YTM Price 4.60% 2 4.80% 2 5.00% 2 (5pts) (a) Find the current price of the zero-coupon bonds. (15pts) (b) Consider a three-year coupon bond with a $2000 face value that pays 10% annual coupons. Show that the price of this three-year bond must be equal to a portfolio of the above zero-coupon bonds. What...
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Consider the following three bonds of $1,000 face value. 1 1% Bond Maturity (year) Coupon Rate A 0.5 3.50% B 1.0 | 0.00% IC 1.5 L 4.90% Price 1002.84 957.24 1006.35 Table 03 (a) Describe and calculate the 0.5-year, 1.0-year and 1.5-year spot rates. (10 marks) (6) You form a portfolio by buying three shares of Bond A, five shares of Bond B and four shares of Bond C. Examine the yield to maturity of the portfolio. (10 marks)
Prices in the table are for zero interest rate government bonds with a $1000 face value Maturity (years) Zero Price 1 $ 970.87 - 2 $ 920.13 3 $ 863.84 4 $ 807.22 • A 5 year government bond with a $1000 face value that pays a 4.0% coupon (with annual payments) is priced at $925 today. 13.(CH15) First, find the implied spot rates for years 1-5 (i.e. bootstrap the yield curve). Based on the spot rates, the shape of...
pls help
4. Consider a bond of face value $1,000 with an annual coupon of 8.0% and 10 years to maturity and a present price of $877.11. Assume the yield curve is flat at 10%. a. Calculate the duration and convexity for this bond. b. Suppose your portfolio consists of this bond only and you want to immunize your interest risks. And suppose you can only buy or sell 1 zero-coupon bond. What should be the maturity of this zero-coupon...
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Your portfolio contains 40% of Bond I, 20% of Bond II, 20% of Bond Ill and 20% of Bond IV. Details of the four bonds are given below: $613.91 10-year zero coupon government bond, par value $1000, current price = II. 10-year zero coupon corporate bond, par value $1000, default premium= 2% III. 5 year 15 % coupon corporate bond, par value $1000, annual coupon payments, default premium 9% and YTM for similar government bond is 6% IV. 5 year...
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