Question 3 (9 marks) Consider the information given in the attached spreadsheet, Assignment 4 2020. (a) From this information, determine the following annualised forward rates. DO NOT hand in any Excel workings to support your answer. Give each answer to 3 significant figures. [5 marks] Forward rate (annualised): Annualised forward rate From time: To time: 0 1 0 2 1 2 14 15 4 5 4 6 4 7 4 8 4 9 4 10 4 11 4 12 4 15 4 20 4 50 (b) Suppose you are to receive payments for the next 12 years. These payments will start at time 1, and then be received annually thereafter until time 12. The first payment will be $1000. Each subsequent payment decreases by 4% (compound) each year. With regards to the interest rate information provided in Assignment 4 2020', calculate the accumulated value of these payments at time 50. Give your answer to the nearest dollar. You do not need to show workings to achieve full marks, but you can show some handwritten workings / explanations if you feel that supports your answer. However, DO NOT hand in any Excel workings to support your answer. [4 marks] B C D E F. G 1 2 3 Forward rates Annualised From time To time forward rate 10 11 2.10% 11 12 2.50% 12 14 3.90% 5 3 Term (duration, in Spot rate 4 years) (Annualised) 0.25% 6 2 0.30% 7 0.30% 8 4 0.30% 9 5 0.50% 10 6 1.00% 11 7 1.10% 12 8 1.20% 13 9 1.50% 14 10 2.00% 15 15 4.50% 16 20 5.60% 17 50 4.50% 18 19 20 Question 3(Assignment4 2020) + Question 3 (9 marks) Consider the information given in the attached spreadsheet, Assignment 4 2020. (a) From this information, determine the following annualised forward rates. DO NOT hand in any Excel workings to support your answer. Give each answer to 3 significant figures. [5 marks] Forward rate (annualised): Annualised forward rate From time: To time: 0 1 0 2 1 2 14 15 4 5 4 6 4 7 4 8 4 9 4 10 4 11 4 12 4 15 4 20 4 50 (b) Suppose you are to receive payments for the next 12 years. These payments will start at time 1, and then be received annually thereafter until time 12. The first payment will be $1000. Each subsequent payment decreases by 4% (compound) each year. With regards to the interest rate information provided in Assignment 4 2020', calculate the accumulated value of these payments at time 50. Give your answer to the nearest dollar. You do not need to show workings to achieve full marks, but you can show some handwritten workings / explanations if you feel that supports your answer. However, DO NOT hand in any Excel workings to support your answer. [4 marks] B C D E F. G 1 2 3 Forward rates Annualised From time To time forward rate 10 11 2.10% 11 12 2.50% 12 14 3.90% 5 3 Term (duration, in Spot rate 4 years) (Annualised) 0.25% 6 2 0.30% 7 0.30% 8 4 0.30% 9 5 0.50% 10 6 1.00% 11 7 1.10% 12 8 1.20% 13 9 1.50% 14 10 2.00% 15 15 4.50% 16 20 5.60% 17 50 4.50% 18 19 20 Question 3(Assignment4 2020) +
