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1. For the following assume US bond make semi-annual coupon payment, while the rest of the world make annual coupon payments. a. Price a German

image text in transcribed 1. For the following assume US bond make semi-annual coupon payment, while the rest of the world make annual coupon payments. a. Price a German government Zero-Coupon bond with ten years to maturity and yield 3\%. b. Price a US Treasury Zero-Coupon bond with two years to maturity and yield 4%. c. Price a US Treasury Zero-Coupon bond with three and a half years to maturity and yield 4.4%. d. Price a US Treasury Zero-Coupon bond with six months to maturity and yield 3\% (US bond assume semi-annual compounding. 2. A US treasury bond is quoted at 117:22. For $100,000 par the dollar price is 3. a. Price a Spanish government bond with a 6.00% coupon rate and 25 years to maturity. The yield to maturity on similar bonds is 5.0%. b. Compute the bond current yield. c. Compute the bond price one year later and the capital gains rate. d. Show the relationship between the current yield, the capital gains rate, and the yield to maturity. 4. The US treasury has two bonds outstanding, both with 2.0% coupon rate. The first has one year to maturity, the second 20 years to maturity. Assume semi-annual coupon payment, and 3.0% yield. a. Calculate the two bonds prices. b. Market conditions have changed, and the bonds yield has dropped to 2.6%. Price both US treasury bonds and evaluate the each bond capital gain rate. What can you conclude about the relative loss and the bonds maturity? 5. Assume the following prices for US treasury zero coupon bonds: Calculate the bond yields and plot the yield curve

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