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thnkuuu so much 2. (Bond) Using information in the following table, answer the following questions. Assuming all government bonds have par value of $1000. (15%)

thnkuuu so much
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2. (Bond) Using information in the following table, answer the following questions. Assuming all government bonds have par value of $1000. (15%) Spot Rate Forward Rate r 7.8% fi 12 9.2% f 10.6% 13 f3 9.8% 14 9.5% f4 15 f's 1) Given the yield curve in the table, computers (5%) 2) 5-year zero bond is priced at $627.64. computers (5%) 3) If you are going to save some money to bank for the fourth year, what should be the forward rate settled now (f4)? (5%) C FV P= + (1+f) = (1+r)" (1 + r)" (1+r) (1+r) t-l

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