You are given the following information about three bonds. Bond Year of Coupon Maturity Yield to Bond
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You are given the following information about three bonds.
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Bond Year of Coupon Maturity Yield to Bond Maturity Price A 2 10% 7.5862% 1,043.29 B 2 20% 7.6746% 1,220.78 C 3 8% 9.7995% 995.09 Coupons are paid at the end of the year (including the year of maturity). All three bonds have a face value of 1,000 at maturity. 1. Find the time zero prices, P1, P2, and P3, of one dollar to be delivered in years 1, 2, and 3, respectively. 2. Find the 1, 2, and 3 year spot rates of interest 11, 12 and 13.
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Related Book For
Lectures On Corporate Finance
ISBN: 9789812568991
2nd Edition
Authors: Peter L Bossaerts, Bernt Arne Odegaard
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