Question
You are given the following information for 4 Bonds: A, B, C, and D. Use this information to answer all the following questions. All interest
You are given the following information for 4 Bonds: A, B, C, and D. Use this information to answer all the following questions.
All interest rate related answers must be entered as a DECIMAL rounded up to 4 DP.
Example: If the answer is 12.3456%, enter 0.1235
[Anything from 0.1234 to 0.1236 will be marked as correct]
Assume that the Face Value of all Bonds is $100.
Assume all Coupons are Paid Semi-Annually.
Bond | Maturity in Years | Coupon Rate (%) | Price in $ |
A | 0.5 | 0.0% | 96.0 |
B | 1.0 | 0.0% | 90.0 |
C | 1.5 | 10.0% | 98.0 |
D | 2.0 | 16.0% | 105.0 |
Q1. Find the 6-month Zero Interest Rate (0R0.5).
Q.2. Find the 1-year Zero Interest Rate (0R1).
Q.3 Find the 1.5-year Zero Interest Rate (0R1.5).
Q.4 Find the 2-year Zero Interest Rate (0R2).
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