Question

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Calculate Zero Rates of Bond prices given below. (Answer in fractions) Maturity Coupon Cash Price 0.5...

Calculate Zero Rates of Bond prices given below.

(Answer in fractions)

Maturity Coupon Cash Price

0.5 0 83

1 0 86

1.5 4 91

2 5 94

Solutions

Expert Solution

The zero rates of bond prices are 91.8323,86.9159,82.5773,80.6670 respectively.

Base for the solution:

Alternatively ,this question can be workout by using yield to maturity formula , in such as case the values would be ,91.6698,86.9565,84.3308,79.3950.

Base for the solution:

jeff jeffy answered 1 year ago
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