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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 3.04%

c. The 3 year zero coupon bond which is priced at $839.60 will have a YTM of 8%.
d. The 3 year zero coupon bond which is priced at $839.60 will have a YTM of 6%.
e. The 4 year zero coupon bond which is priced at $822.80 will have a YTM of 5%
f.

The forward rate from year 3 to 4 is 2.04%

g. The 3 year zero coupon bond which is priced at $839.60 will have a YTM of 7%.
h.

The forward rate from year 3 to 4 is 4.04%

i. The 4 year zero coupon bond which is priced at $822.80 will have a YTM of 6%

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