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show work! this all i got! i think face value should 100 Question 1. Bond pricing using spot rates You have a 2 year semiannual
show work!
this all i got! i think face value should 100
Question 1. Bond pricing using spot rates You have a 2 year semiannual coupon bond with 6 percent coupon rate and attempt to value of the bond. To price the value of the bond, you need to use a cash flow table as below. (Note that all the yields are continuously compounded.) Maturity Present Value of CF 0.5 C. 1.0 1.5 Zero Rate 5.11 5.20 6.01 6.55 C 106 . a. Compute the missing present values (PV) of each cash flow. b. Compute the value of bond price by taking sum of all present values. c. Compute the yield to maturity (YTM). d. Compute the duration and convexity. e. What is the new bond price if the term structure of yields move up 15 basis points (bp). f. What is the new bond price if the YTM move up 15 bp Step by Step Solution
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