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As a junior financial analyst at Citibank bond trading desk, John is analyzing the forward rate using the information from zero coupon bonds. Suppose 3
As a junior financial analyst at Citibank bond trading desk, John is 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. Please note that each incorrect answer will reduce the score by 10%. a. The 4 year zero coupon bond which is priced at $822.80 will have a YTM of 7% b. The forward rate from year 3 to 4 is 2.04% c. The 4 year zero coupon bond which is priced at $822.80 will have a YTM of 6% d. The 4 year zero coupon bond which is priced at $822.80 will have a YTM of 5% e. The 3 year zero coupon bond which is priced at $839.60 will have a YTM of 6%. f. The forward rate from year 3 to 4 is 4.04% g. The 3 year zero coupon bond which is priced at $839.60 will have a YTM of 8%. h. The forward rate from year 3 to 4 is 3.04% Oi. The 3 year zero coupon bond which is priced at $839.60 will have a YTM of 7%
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