Question
As a financial analyst at JPMorgan Chase bond desk, you are analyzing the forward rate using the information from zero coupon bonds. Suppose 3 year
As a financial analyst at JPMorgan Chase bond desk, you are analyzing the forward rate using the information from zero coupon bonds. Suppose 3 year zero coupon bond is priced at $839.60 and 4 year zero coupon bond is priced at $822.80. Choose all correct answers.
| a. | The 3 year zero coupon bond which is priced at $839.60 will have a YTM of 7%. | |
| b. | The 4 year zero coupon bond which is priced at $822.80 will have a YTM of 5% | |
| c. |
The forward rate from year 3 to 4 is 2.04%
| |
| d. | The 4 year zero coupon bond which is priced at $822.80 will have a YTM of 7% | |
| e. | The 4 year zero coupon bond which is priced at $822.80 will have a YTM of 6% | |
| f. | The 3 year zero coupon bond which is priced at $839.60 will have a YTM of 8%. | |
| g. |
The forward rate from year 3 to 4 is 3.04%
| |
| h. | The 3 year zero coupon bond which is priced at $839.60 will have a YTM of 6%. | |
| i. |
The forward rate from year 3 to 4 is 4.04% |
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
9th Edition
125972266X, 9781259722660
