Question
Derive the probability distribution of the 1-year HPR on a 30-year U.S. Treasury bond with an 4.0% coupon if it is currently selling at par
Derive the probability distribution of the 1-year HPR on a 30-year U.S. Treasury bond with an 4.0% coupon if it is currently selling at par and the probability distribution of its yield to maturity a year from now is as follows: (Assume the entire 4.0% coupon is paid at the end of the year rather than every 6 months. Assume a par value of $100.) (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" & "%" signs in your response.)
Economy | Probability | YTM | Price | Capital Gains | Coupon Interest | HPR |
Boom | .10 | 6.0 | 72.47 | 4.0 | ||
Normal Growth | .60 | 5.0 | 84.62 | 4.0 | ||
Recession | .30 | 4.0 | 100.00 | 0.00 | 4.0 | 4.0 |
Please fill in the rest.
P.S. - The answers that is already in the Chegg System is wrong. Please help!
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