Question
Suppose the four-year zero coupon bond is priced at 0.7350 and the-five year zero coupon bond is priced at 0.6650; what is the implied forward
Suppose the four-year zero coupon bond is priced at 0.7350 and the-five year zero coupon bond is priced at 0.6650; what is the implied forward zero coupon bond price from year 4 to year 5? (Note that the zero coupon bond has the face value of $1.)
Question options:
| 1.1053 |
| 0.9048 |
| 0.8186 |
| 0.4888 |
Suppose the two year interest rate (i.e., the two-year zero coupon yield) is 8% per annum compounded annually, and the three year interest rate (i.e., the two-year zero coupon yield) is 9% per annum compounded annually), what is the implied forward rate from year 2 to year 3?
Question options:
| 1.00% |
| 11.03% |
| 19.91% |
| 8.50% |
Question 5
What is the value of a Coca Cola's bond that has a 11.25 percent coupon, pays interest semiannually, and has 10 years to maturity, if the required rate of return is 16 percent? The face value of the bond is $1000.
Question options:
| $770.42 |
| $766.82 |
| $552.27 |
| $732.63 |
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