The following is a list of prices for zero-coupon bonds of various maturitiesa. Calculate the yield to maturity for a bond with a maturity of one year: 60 two years: (three years; (v) four years. Assume annualcoupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.)Maturity (Years)Price of BondYTM1$973.40%2$919.97%3$841.62%4$788.89%b. Calculate the forward rate for the second year; 0) the third year; (i) the fourth year. Assume annual coupon payments. (Do notround intermediate calculations. Round your answers to 2 decimal places.)Maturity (years)Price of Bood$973.40$19.97941.62788.89Maturity (Years)Price of BondForward Rate2$919.973S84162Th4$788.89S

Yield To Maturity:It is the rate of return for the bondholders for holding the bond till the…

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: 00 two years: (i) three years; (v) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (Years) Price of Bond YTM 1 $ 973.40 % 2 $ 919.97 N 3 $ 841.62 % 4 $ 768.80 N b. Calculate the forward rate for the second year: 00 the third year; (i) the fourth year. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 1 973.40 519.97 943.62 780.85 Maturity (Years) Price of Bond Forward Rate 2 $ 919.97 3 $ 84162 4 $ 788.89 N

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: 00 two years: (i) three years; (v) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (Years) Price of Bond YTM 1 $ 973.40 % 2 $ 919.97 N 3 $ 841.62 % 4 $ 768.80 N b. Calculate the forward rate for the second year: 00 the third year; (i) the fourth year. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 1 973.40 519.97 943.62 780.85 Maturity (Years) Price of Bond Forward Rate 2 $ 919.97 3 $ 84162 4 $ 788.89 N

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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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 (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price of Bond YTM Maturity (Years) 1 978.43 2.20 % 2 924.97 % 3 840.12 % 4 $ 784.39 % b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price of Bond Maturity (years) 1 $ 978.43 2 924.97 840.12 784.39 Maturity (Years) Price of Bond Forward Rate 2 % 3 % 4 % AWN 3 4 $ $ GA $ $ $ SA 924.97 840.12 784.39
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 (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (Years) Price of Bond YTM 1 $ 943.40 % 2 $ 898.47 % $ 847.62 % $ 792.16 % b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to the nearest whole percent.) Maturity (years) Price of Bond 1 $943.40 898.47 847.62 792.16 Maturity (Years) Price of Bond Forward Rate $ 898.47 % 3 $ 847.62 % 4 $ 792.16
Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Price $983.78 865.89 797.92 732.00 660.24 Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4?
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; (i) three years; (v) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (Years) 1 2 3 4 $ $ $ $ Price of Bond 950.90 899.97 877.62 785.26 YIM % % % Check my w %
The following is a list of prices for zero-coupon bonds of various maturities. Maturity (years) 1 2 Price of Bond $ 930.00 902.97 3 4 829.62 772.99 Required: a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Maturity (Years) Price of Bond YTM 1 $ 930.00 % 2 $ 902.97 % 3 $ 829.62 % 4 $ 772.99 %
Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) Price 1 $ 998.78 2 880.89 3 815.92 4 752.40 5 685.70 a. Calculate the forward rate of interest for each year. (Round your answers to 2 decimal places.) b. How could you construct a 1-year forward loan beginning in year 3? (Round your Rate of synthetic loan answer to 2 decimal places.) c. How could you construct a 1-year forward loan beginning in year 4? (Round your answers to 2 decimal places.)
The following is a list of prices for zero-coupon bonds of various maturities. Maturity (years) Price of Bond 1 $ 953.40 2 903.47 3 852.62 4 787.66 Required: Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments.
Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4? Required A Price $940.93 Complete this question by entering your answers in the tabs below. 868.39 800.92 735.40 670.48 Required B Maturity (years) 2 3 Calculate the forward rate of interest for each year. Note: Round your answers to 2 decimal places. Required C Forward Rate % % Prov 12 of 12 Next
The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of the face value): Maturity (years) Price (per $100 face value) 1 $96.32 a. Compute the yield to maturity for each bond. b. Plot the zero-coupon yield curve (for the first five years). c. Is the yield curve upward sloping, downward sloping, or flat? a. Compute the yield to maturity for each bond. The yield on the 1-year bond is %. (Round to two decimal places.) 2 $91.93 3 $87.36 4 5 $82.57 $77.42
The following is a list of prices for zero-coupon bonds of various maturities. The face value is $1,000. Use your answers in part (a) to calculate the forward rates in part (b). Maturity (years) Price of Bond 1 $ 978.43 2 924.97 3 840.12 4 784.39 Required: Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments.
The following is a list of prices for zero-coupon bonds of various maturities. Maturity (years) 1 2 3 4 Price of Bond $ 980.90 914.97 843.12 771.76 Required: a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Maturity (Years) Price of Bond YTM 1 $ 980.90 % 2 $ 914.97 % 3 $ 843.12 %
The following table shows some data for three bonds. In each case, the bond has a coupon of zero. The face value of each bond is $1,000. Bond Price Maturity (Years) Yield to Maturity A $ 230 20 B с 230 17 10% 9 What is the yield to maturity of bond A? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places. Assume annual compounding. What is the maturity of B? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Assume annual compounding. What is the price of C? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Assume annual compounding.

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