Question
1.What will be the future value of $500 at the end of five years, if the annualized interest rate is 12% and the frequency of
1.What will be the future value of $500 at the end of five years, if the annualized interest rate is 12% and the frequency of compounding is monthly?
2.What will be the future value of $500 at the end of five years, if the annualized interest rate is 12% and the frequency of compounding is continuously?
3.The current market price of a 10-year zero-coupon bond is $1,234.567. The face value of the bond is $2,000.00. Then, what is the continuous compounded yield per annum (annualized yield compounded continuously) on this bond?
4.The current market price of a given zero-coupon bond is $747.470. The face value of the bond is $1,000.000. The continuously compounded yield on the bond is 7.000%. Then, what is the implied time to maturity (in years) of this bond?
5.What is the effective annualized rate compounded monthly that is equivalent to 14.000% per annum compounded continuously?
6.YOUR BANK is thinking to issue a regular coupon bond (debenture) with the following particulars: Maturity = 5 years, Coupon rate = 9%, Face value = $1,500, Coupon payments are annual and paid at the end of a year. In the fixed-income securities market, the yield curve for the bond similar to the one issued by YOUR BANK is flat and it is 6.500% per annum continuously compounded. As per you, what should be the issue (offer) price per bond of YOUR BANK in US dollars?
7.YOUR BANK is thinking to issue a regular coupon bond (debenture) with following particulars: Maturity = 4 years, Coupon rate = 9.000%, Face value = $1,000.00, Coupon payments are annual and paid at the end of a year. In the fixed-income securities market, the yield curve for a bond with a similar default risk characteristics as one issued by YOUR BANK, is downward-upward sloping with the following interest rates per annum continuously compounded: R0,1=8.000%R0,1=8.000% , R0,2=7.000%R0,2=7.000% , R0,3=6.000%R0,3=6.000% , R0,4=7.000%R0,4=7.000% , and R0,5=7.500%R0,5=7.500% , Where, the notation R0,TR0,T is the spot-interest rate (at time t=0t=0 ) for TT year maturity zero-coupon bond. As per you, what should be the issue (offer) price per bond of YOUR BANK in US dollars?
8.
Consider three 5 year bonds; each bond has a face value of $100. All bonds mature on the same date. All bonds pay annual coupons at the same point in time. The coupons and current prices for the three bonds are:
Bond | COUPON | PRICE |
A | $10.00 | $103.898 |
B | $7.00 | $91.305 |
C | $9.00 | PC |
Based on the above information, what is the Price of Bond C (PC)?
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