1. You own a SIOOO-par zero-coupon bond that has five years of remaining maturity. You plan on...

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1. You own a SIOOO-par zero-coupon bond that has five years of remaining maturity. You plan on sell-

ing the bond in one year, and believe that the required yield next year will have the following probability distribution:

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a. What is your expected price when you sell the bond?

b. What is the standard deviation of the bond price?

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Financial Markets and Institutions

ISBN: 978-0321280299

5th edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

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Question Posted: Sep 21, 2024 09:01 AM

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1. You own a SIOOO-par zero-coupon bond that has five years of remaining maturity. You plan on...

Question:

Probability Required Yield % 0.1 6.60% 0.2 6.75% 0.4 7.00% 0.2 7.20% 0.1 7.45%

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Financial Markets and Institutions

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