Question
Right answer is d, please give right solution and explain which formulas are used! There is a one-year coupon bond (exactly one year to maturity)
Right answer is d, please give right solution and explain which formulas are used!
There is a one-year coupon bond (exactly one year to maturity) with the following characteristics: nominal value M=10000PLN, interest i=3% and current price P=9763.03PLN. There is also a two-year zero coupon bond (exactly two years to maturity) with the nominal value M=1000PLN and the current price P=880. What is the implied forward rate fis based on the yield on this bond (using the compound interest method)?
- not possible to calculate (not enough information)
- close to 7.77%
- close to 13.62%
- close to 7.71%
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