Question
Consider an 5.0% coupon bond selling for $951.10 with 3 years until maturity making annual coupon payments. The interest rates in the next 3 years
Consider an 5.0% coupon bond selling for $951.10 with 3 years until maturity making annual coupon payments. The interest rates in the next 3 years will be, with certainty, r1 = 5%, r2 = 7%, and r3 = 8%. Calculate the yield to maturity and realized compound yield of the bond. (Round your answers to 2 decimal places. Omit the "%" sign in your response.) |
Yield to maturity | % |
Realized compound yield | % |
Fill in the table below for the following zero-coupon bonds, all of which have par values of $1,000. Assume annual compounding. (Round your answers to 2 decimal places. Omit the "$" and "%" signs in your response.) |
Price | Maturity (years) | Bond-Equivalent Yield to Maturity | |||||||
$ | 575.00 | 10 | % | ||||||
$ | 500.00 | 10 | % | ||||||
$ | 610.00 | 20 | % | ||||||
$ | 12 | 6.80 | % | ||||||
$ | 10 | 6.80 | % | ||||||
$ | 567.97 | 3.90 | % | ||||||
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