Zero-Coupon Bonds (ZCBS) with maturity in 1 and 5 years are available on the market. Their redemption value is £100, and they sell for £95 (1-year ZCB)and £88 (5-year ZCB).Find the spot rates corresponding to the ZCBS' pricesi1=数字%i5数字%Enter a percentage correct to 2 decimal placesCalculate the forward rate i 1,51,5 = 数字%Enter a percentage correct to 2 decimal places

Reference : Financial Engineering, Financial Economics, Computational Finance, Spot rate, Forward,…

Answered: Zero-Coupon Bonds (ZCBS) with maturity…

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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Zero-Coupon Bonds (ZCBS) with maturity in 1 and 5 years are available on the market. Their redemption value is £100, and they sell for £95 (1-year ZCB) and £88 (5-year ZCB). Find the spot rates corresponding to the ZCBs' prices 11 = Number % 15 = Number % Enter a percentage correct to 2 decimal places Calculate the forward rate 1,5 1,5 Number % Enter a percentage correct to 2 decimal places
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