Mode page A Lire haute voix | Ajouter du texte 3) Calculate the beta of the portfolio (5 pts) Answers Exercise 4 The spot rates are: One-year rate= Two-year rate Three-year rate= 5.88% 6.71% 7.22% 1) Calculate the one-year forward rate in one year (5 pts) (A) 7.76% (B) 7.45% [C) 7.55% (D) 7.98% 2) Calculate the two-year forward rate in one year (5 pts) (A) 7.02% (B) 7.47% (C) 7.9 % (D) 7.6% 3) Calculate the one-year forward rate in two years (5 pts) (A) 8.25% (B) 8.5% (C) 9% (D) 8.78% 4) This economy is: (5 pts) (A) Booming (B) In recession (C) Normal === OSEBEEEEEEEEEEE Exercise 5 The prices of four zero-coupon bonds are (all face values are $1000): Bond Maturity Price A 962.28 B 2 910.84 3 853.07 790 726.46 A bond has a face value of $1000 a coupon rate of 6% and matures in four years. 1) Calculate the price of this bond now (10 pts) Answers Suppose you buy the bond now and plan to sell it in one year. 2) Calculate the expected rate of return of this bond (10 pts) Answers Exercise 6