In: Finance

You have estimated spot rates as follows:

*r*_{1}*=*
1.5%, *r*_{2}*=*
1.8%, *r*_{3}*=*
2.1%, *r*_{4}*=*
2.3%, *r*_{5}*=* 3.5%,
*r*_{6}*=* 4.5%.

Calculate the price of bond with an annual coupon rate of 4.5% and six years to maturity. Face value of the bond is $1000.

$1011.5

$1050.5

$1000

$1032.5

$1025.5

**Ans is -$ 1011.5**

Calculations-

Please upvote if the ans is helpful.In case of doubt,do comment.Thanks.

You have estimated spot rates as follows:
r1= 5.60%,
r2= 6.00%,
r3= 6.30%,
r4= 6.50%,
r5= 6.60%.
a. What are the discount factors for each date
(that is, the present value of $1 paid in year t)?
b. Calculate the PV of the following $1,000
bonds assuming an annual coupon and maturity of : (i) 5.6%,
two-year bond; (ii) 5.6%, five-year bond; and (iii) 10.6%,
five-year bond.
c. What should be the yield to maturity on a
five-year zero-coupon bond?...

You have estimated
spot rates as follows:
r1= 6.40%,
r2= 6.80%,
r3= 7.10%,
r4= 7.30%,
r5= 7.40%.
a.
What are the discount factors for each date (that is, the present
value of $1 paid in year t)? (Do not round
intermediate calculations. Round your answers to 3 decimal
places.)
year
Discount Factor
1
2
3
4
5
b. Calculate the PV of the following $1,000
bonds assuming an annual coupon and maturity of : (i) 6.4%,
two-year bond; (ii) 6.4%,...

Suppose that the following risk-free spot rates prevail in the
market: r1=4%,
r2=5%, r3=6%,
r4=6.5%, where rT
denotes the spot rate per annum on an investment with T years to
maturity, quoted with annual compounding. You can borrow and lend
at these rates. Let
f(T1,T2)
denote the annual forward rate, quoted with annual compounding,
applicable to a forward rate agreement to borrow or lend money in
T1 years from today until T2
years from today.
Questions:
Compute the forward rate...

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