You are a fund manger in RT Asset Management Fund. You manage a portfolio consist of both stocks, bonds and currencies. The following table shows information of Treasury bond market in Hong Kong (nominated in HKD) and UK (denominated in GBP). Year Zero-coupon bond One-year implied yield (HKD) forward rate (HKD) Par coupon rate (HKD) Zero-coupon bond yield (GBP) 6% 3% 6.5% 4% 7% 5% Question 22 A 3-year zero-coupon Treasury bond has a face value of $100. What is the yield-to-maturity? (in%) *Leave your answer in 4 d.p Answer: You are a fund manger in RT Asset Management Fund. You manage a portfolio consist of both stocks, bonds and currencies. The following table shows information of Treasury bond market in Hong Kong (nominated in HKD) and UK (denominated in GBP). Year Zero-coupon bond One-year implied yield (HKD) forward rate (HKD) Par coupon rate (HKD) Zero-coupon bond yield (GBP) 6% 3% 6.5% 4% 7% 5% Question 22 A 3-year zero-coupon Treasury bond has a face value of $100. What is the yield-to-maturity? (in%) *Leave your answer in 4 d.p