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Use this information for the following 7 questions. The following is a list of prices for zero-coupon bonds of various maturities: Maturity (years) Spot rates
Use this information for the following 7 questions. The following is a list of prices for zero-coupon bonds of various maturities: Maturity (years) Spot rates Forward rates Price of Bond ($) 947.87 1 2 873.44 793.83 3 4 735.03 a) What is the spot rate s? (Ipt, Answer format: 14.20, in percent, but include no % symbol, round to 2 digits.) QUESTION 35 b) What is the spot rate sz? (Ipt, Answer format: 14.20, in percent, but include no % symbol, round to 2 digits.) QUESTION 36 c) What is the forward rate f1,2? (Ipt, Answer format: 14.20, in percent, but include no % symbol, round to 2 digits.) QUESTION 37 d) What is the forward rate f3,4? (Ipt, Answer format: 14.20, in percent, but include no % symbol, round to 2 digits.) QUESTION 38 e) What is the price of a 4-year maturity bond with a 9% coupon rate paid annually? (Par value = $1,000). (2pt, Answer format: 1010.20, include no $ symbol, round to 2 digits.) QUESTION 39 f) What will be the price of the bond in the previous question one year from now, if the forward rates stay the same? (2pt, Answer format: 1010.20, include no $ symbol, round to 2 digits.) QUESTION 40 g) What will be the holding period return over year one, if the forward rates stay the same? (1pt, Answer format: 14.20, in percent, but include no % symbol, round to 2 digits.)
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