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Need detailed calculation. Thank u Question Completion Status: QUESTION 1 Consider two coupon bonds that make semi-annual coupon payments. One bond matures in exactly 1/2
Need detailed calculation. Thank u
Question Completion Status: QUESTION 1 Consider two coupon bonds that make semi-annual coupon payments. One bond matures in exactly 1/2 year, has a coupon rate of 4%, and has a market price of Bo= $100.98 per face (principal) value of F=$100. The second bond matures in exactly one year, has a coupon rate of 6%, and has a market price of Bo=$103.91 per face (principal) value of F=$100. What is the discount function at a maturity of 1 year, P(0.1)? (State your answer to the second decimal point.) QUESTION 2 Consider three coupon bonds that make semi-annual coupon payments. One bond matures in exactly 1/2 year, has a coupon rate of 4%, and has a market price of Bo= $100.98 per face (principal) value of F=$100. The second bond matures in exactly one year, has a coupon rate of 6%, and has a market price of Bo=$103.91 per face (principal) value of F=$100. The third bond matures in exactly 1.5 years, has a coupon rate of 4%, and has a market price of Bo=$102.88 per face (principal) value of F=$100. What is the discount function at a maturity of 1.5 years, P(0.1.5)? (State your answer to the second decimal point.) QUESTION 3 To hedge a short position in a bond forward contract, the short party should O a. invest at a maturity equal to the date that the bond is to be delivered. borrow at a maturity equal to the maturity of the bond to be delivered. b C borrow at a short maturity and invest the funds at a longer maturity. Od. borrow at a longer maturity and invest the funds at a shorter maturity. QUESTION 4 When the spot yield curve is downward sloping a. the forward rate curve is above it, and the par rate curve is below it. O b. the forward rate curve and the par rate curve are both above it. C. the forward rate curve and the par rate curve are both below it. O d. the forward rate curve is below it, and the par rate curve is above itStep by Step Solution
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