Question

In: Finance

The following is a list of prices for zero-coupon bonds with different maturities but same par...

The following is a list of prices for zero-coupon bonds with different maturities but same par value of $1,000: the 1-year zero bond sells at $925.15, the 2-year zero bond sells at $862.57, the 3-year zero bond sells at $788.66, and the 4-year zero bond sells at $711.00. You have purchased a 4-year maturity bond with a 9% coupon rate paid annually. The bond has a par value of $1,000.

What would be the price of the bond one year from now if the implied forward rates stay the same?

Solutions

Expert Solution

Price of Bond after 1 year = $1,005.36




jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

The following is a list of prices for zero-coupon bonds with different maturities but same par...
The following is a list of prices for zero-coupon bonds with different maturities but same par value of $1,000: the 1-year zero bond sells at $925.15, the 2-year zero bond sells at $862.57, the 3-year zero bond sells at $788.66, and the 4-year zero bond sells at $711.00. You have purchased a 4-year maturity bond with a 9% coupon rate paid annually. The bond has a par value of $1,000. What would be the price of the bond one year...
The following is a list of prices for zero-coupon bonds with different maturities but same par...
The following is a list of prices for zero-coupon bonds with different maturities but same par value of $1,000: the 1-year zero bond sells at $1000, the 2-year zero bond sells at $862.57, the 3-year zero bond sells at $788.66, and the 4-year zero bond sells at $711.00. You have purchased a 4-year maturity bond with a 9% coupon rate paid annually. The bond has a par value of $1,000. What would be the price of the bond one year...
The following is a list of prices for zero-coupon bonds with different maturities but same par...
The following is a list of prices for zero-coupon bonds with different maturities but same par value of $1,000: the 1-year zero bond sells at $925.15, the 2-year zero bond sells at $862.57, the 3-year zero bond sells at $788.66, and the 4-year zero bond sells at $711.00. You have purchased a 4-year maturity bond with a 9% coupon rate paid annually. The bond has a par value of $1,000. What would be the price of the bond one year...
The following is a list of prices for zero-coupon bonds of various maturities. a. Calculate 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 (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 1 $ 978.43 2 924.97 3 840.12 4 784.39 b. Calculate the forward rate for (i) the second year; (ii) the...
The following is a list of prices for zero-coupon bonds of various maturities. a. Calculate 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 (i) one year; (ii) two years; (iii) three years; (iv) four years. (Do not round intermediate calculations. Round your answers to two decimal places.) Maturity (Years)Price of Bond YTM 1   $910.90 2   $907.97 3 $828.12 4 $768.49 b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth...
The following is a list of prices for zero-coupon bonds of various maturities. Calculate the yields...
The following is a list of prices for zero-coupon bonds of various maturities. Calculate the yields to maturity of each bond and the implied sequence of forward rates. Maturity (Years) Price of Bond 1 $917.43 YTM= IFR= 2 $826.51 YTM= IFR= 3 $737.96 YTM= IFR= 4 $653.06 YTM= IFR=
Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) Price of...
Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) Price of $1,000 Par Bond (Zero-Coupon) 1 $ 978.14 2 893.66 3 807.34 a. A 9.7% coupon $1,000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be? b. If at the end of the first year the yield curve flattens out at 8.0%, what will be the 1-year holding-period return on the coupon...
Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) Price of...
Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) Price of $1,000 Par Bond (Zero-Coupon) 1 $ 945.80 2 877.23 3 803.34 a. A 4.8% coupon $1,000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be? (Round your answer to 2 decimal places.) b. If at the end of the first year the yield curve flattens out at 8.4%, what will be...
Below is a list of prices for $1,000-par zero-coupon Treasury securities of various maturities. An 11%...
Below is a list of prices for $1,000-par zero-coupon Treasury securities of various maturities. An 11% coupon $100 par bond pays an semi-annual coupon and will mature in 1.5 years. What should be the YTM on the bond? Assume semi-annual interest compounding for this question. Maturity (periods) Price of $1,000 par bond 1 943.4 2 873.52 3 770
Below is a list of prices for $1,000-par zero-coupon Treasury securities of various maturities. An 12%...
Below is a list of prices for $1,000-par zero-coupon Treasury securities of various maturities. An 12% coupon $100 par bond pays an semi-annual coupon and will mature in 1.5 years. What should be the YTM on the bond? Assume semi-annual interest compounding for this question. Maturity (periods) Price of $1,000 par bond 1 943.4 2 873.52 3 780
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT