Question
You are considering a coupon bond (par=$1,000) that pays an annual interest. Its annual coupon rate is 5%, and the bond matures in 5 years.
You are considering a coupon bond (par=$1,000) that pays an annual interest. Its annual coupon rate is 5%, and the bond matures in 5 years. If the bond is currently selling at a $84.52 discount from par value, what is the current yield?
| A. | 5.46% | |
| B. | 5.00% | |
| C. | 5.94% | |
| D. | 6.00% |
One-, two-, and three-year maturity, default-free, zero-coupon bonds have YTM of 7%, 7.5%, and 8.2%, respectively. If the expectations theory is correct, what is the implied one-year forward rate, one year from today (i.e., f2)?
| A. | 7.78% | |
| B. | 7.92% | |
| C. | 8.00% | |
| D. | 8.11% |
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Finance And Financial Markets
Authors: Keith Pilbeam
4th Edition
1137515627, 978-1137515629
