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You have estimated spot rates as follows: r1 6.10%, r2 6.50% , r3 6.80% , r4= 7.00 %, r5 = 7.10 % a. What are
You have estimated spot rates as follows: r1 6.10%, r2 6.50% , r3 6.80% , r4= 7.00 %, r5 = 7.10 % a. What are the discount factors for each date (that is, the present value of $1 paid in year ? (Do not round intermediate calculations. Round your answers to 3 decimal places.) Answer is complete and correct. Discount Factors Year 0.943 2 0.882 3 0.821 0.763 4 0.710 b. Calculate the PV of the following $1,000 bonds assuming an annual coupon and maturity of () 6.1%, two-year bond; (ii) 6.1%, five- year bond; and (ii) 11.1%, five-year bond. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Present Value b- 6.10 %, two-year bond 939.15 b- 6.10%, five-year bond 917.55 b- 11.10%, five-year bond 1,087.95
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