The price of a 3-month zero-coupon bond with $100 face value is $99.50. The price of...
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The price of a 3-month zero-coupon bond with $100 face value is $99.50. The price of a 6-month zero-coupon bond with $100 face value is $99.10. The price of a fixed- rate coupon bond which has a maturity of 9 months, a coupon rate of 3%, a face value of $100, and which pays coupons quarterly, is $100. Three months ago the 6-month semi- annually compounded spot rate was 4%. a. (3 points) What is the price of a 0.75-year floating-rate bond, which pays coupons semi-annually, which has a face value of $100, and the coupon rate of which is equal to the semi-annually compounded 6-month spot rate plus 2% spread? b. (1 point) What is the price of a 4-year floating-rate bond, which pays coupons semi- annually, which has a face value of $100, the coupon rate of which is equal to the semi-annually compounded 6-month spot rate, and which has just paid its most recent coupon? The price of a 3-month zero-coupon bond with $100 face value is $99.50. The price of a 6-month zero-coupon bond with $100 face value is $99.10. The price of a fixed- rate coupon bond which has a maturity of 9 months, a coupon rate of 3%, a face value of $100, and which pays coupons quarterly, is $100. Three months ago the 6-month semi- annually compounded spot rate was 4%. a. (3 points) What is the price of a 0.75-year floating-rate bond, which pays coupons semi-annually, which has a face value of $100, and the coupon rate of which is equal to the semi-annually compounded 6-month spot rate plus 2% spread? b. (1 point) What is the price of a 4-year floating-rate bond, which pays coupons semi- annually, which has a face value of $100, the coupon rate of which is equal to the semi-annually compounded 6-month spot rate, and which has just paid its most recent coupon?
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a To find the price of the 075year floatingrate bond First lets calculate the semiannually ... View the full answer
Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
Posted Date:
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