The following table provides the prices of three zero-coupon bonds. Assuming annual coupons, what is the price of a 5% coupon bond that matures in three years and has a par value of $100? Maturity (years) 1 2 3 $98.18 $100.94 $101.53 $99.78 Price (per $100 par value) 96.20 91.60 86.10
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- Suppose that all bonds have $1,000 of face value. The current prices of zero coupon bonds are as follows: $960 for a one-year bond; $910 for a two-year bond; $850 for a three-year bond. a. What is the price of a three-year bond with 8% annual coupon payment? b. What is the YTM of the two-year zero coupon bond? c. Consider the following two-year bonds: (i) a zero coupon bond as above; (ii) a bond with 6% annual coupon payment. Whose YTM is higher?The following table summarizes current prices of various zero-coupon bonds (expressed as a percentage of face value): Bond A B C D Maturity (years) 1 2 3 4 Price (per $100 face value) 96.62 82.56 82.69 83.26 E.G for bond A it will mature in 1 year and has a current bond price of $96.62. For bond B, it will mature in 2 years and had a current bond price of $82.56 Assume the YTM for each bond doesn't change over time. After two years, what is the price for bond D? 1. bond A 2. bond B 3. bond C 4. Bond DThe following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of the face value): Maturity (years) Price (per $100 face value) 1 $96.32 a. Compute the yield to maturity for each bond. b. Plot the zero-coupon yield curve (for the first five years). c. Is the yield curve upward sloping, downward sloping, or flat? a. Compute the yield to maturity for each bond. The yield on the 1-year bond is %. (Round to two decimal places.) 2 $91.93 3 $87.36 4 5 $82.57 $77.42
- Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities. Assume face value is $100. Bond Coupon (%) 2 Price (%) 48 80.57 97.19 134.92 a. What is the yield to maturity of each bond? b. What is the duration of each bond? Complete this question by entering your answers in the tabs below. Required A Required B What is the yield to maturity of each bond? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Bond Coupon YTM (%) 2 4 6.00 % 7.42% 8 7.01 %Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Price $983.78 865.89 797.92 732.00 660.24 Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4?Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities. Assume face value is $100. Bond Coupon (%) Price (%) 3 86.50 5. 105.50 9. 136.50 a. What is the yield to maturity of each bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Bond Coupon (%) YTM 3. % 9. % b. What is the duration of each bond? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Bond Coupon (%) Duration years years 9. years
- Consider the following risk-free bonds available for sale in the bond market (assume annual +Coupons). Bond's maturity Ask Price (per $100 of Coupon rate (in %) face value 1-year bond 100.0040 0.125% 2-year bond 101.2100 2% 3-year bond 101.2140 1.625% Construct the term structure of interest rates for these three periods. b. Your company plans to issue three-year maturity coupon bonds. Based on its excellent credit rating, your company pays a low constant 3% risk premium over the relevant term-structure rates. You plan to issue bonds priced at par (i.e. price = face value). At what level should you plan to set the coupon on your bond to justify this price? c. Now assume that your company wishes to issue 3-year zero coupon bonds. At what price will these bonds sell?Vhat is the yield of each of the following bonds, if interest (coupon) is paid semiannually? 6% 20 8.02 % 5800.00 d of the following bond if interest (coupon) is 1 Data Table - X Years to Coupon Rate Matunty 12% 10 (Click on the following icon n in order to copy its contents into a spreadsheet.) eld of the following bond if interest (coupon) is Par Value $1,000.00 Yield to Maturity Matunty Doupon Rale 6% Price $800.00 $1,000.00 S3.110.00 $1.130.00 క Noturty 20 10 Coupon ato $1.000.00 12% 7% 20 $5,000.00 $1.000.00 7% 20 8% yield of the following bond if interest (coupon) is Yoars to Coupon Hate Print Done Maturity 00 8%Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities. Assume face value is $100. Bond Coupon (%) Price (%) 2 81.06 97.75 134.22 4 8 a. What is the yield to maturity of each bond? b. What is the duration of each bond?
- Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities. Assume face value is $100 Bond Coupon (X) Price X) 89.00 10.00 139.00 10 o. What is the yield to maturity of each bond? (Do not round intermediate calculations. Enter your enswers es a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Bond Coupon (%) YIM 434 % 4.04 O% 5.10 O% 10 b. What is the duration of each bond? (Do not round intermediete celculations. Round your enswers to 2 decimal places.) Answer is complete but not entirely correct. Bond Duration Coupon () 873 years 3. 817 years 10 7.19 CyearsA 3-month zero-coupon bond is selling for $99.7 and a 10-year zero-coupon bond is selling for $54.3. Both bonds have a face value of $100. What's the 10-year - 3-month spread in their yields? Answer in percent, rounded to one decimal place. Give typing answer with explanation and conclusionAssume coupons are paid annually. Here are the prices of three bonds with 10-year maturities. Assume face value is $100. Bond Coupon (8) 4 8 Price (1) 81.55 98.31 133.52 a. What is the yield to maturity of each bond? b. What is the duration of each bond? Complete this question by entering your answers in the tabs below. Required A Required B What is the yield to maturity of each bond? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Bond Coupon (%) 2 4 8 YTM 7.05% % %