Question: Answer part c and d please Problem 15-13 Prices of zero-coupon bonds reveal the following pattern of forward rates: Year 1 WNP Forward Rate 5%

Answer part c and d please Problem 15-13 Prices of zero-coupon bonds reveal the following pattern of forward rates: Year 1 WNP Forward Rate 5% 7 8 2 3 In addition to the zero-coupon bond, investors Answer part c and d please

Problem 15-13 Prices of zero-coupon bonds reveal the following pattern of forward rates: Year 1 WNP Forward Rate 5% 7 8 2 3 In addition to the zero-coupon bond, investors also may purchase a 3-year bond making annual payments of $45 with par value $1,000. a. What is the price of the coupon bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Price $ 944.14 b. What is the yield to maturity of the coupon bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Yield to maturity 6.66 % c. Under the expectations hypothesis, what is the expected realized compound yield of the coupon bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Realized compound yield % d. If you forecast that the yield curve in 1 year will be flat at 8.0%, what is your forecast for the expected rate of return on the coupon bond for the 1-year holding period? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Holding period return % Problem 15-13 Prices of zero-coupon bonds reveal the following pattern of forward rates: Year 1 WNP Forward Rate 5% 7 8 2 3 In addition to the zero-coupon bond, investors also may purchase a 3-year bond making annual payments of $45 with par value $1,000. a. What is the price of the coupon bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Price $ 944.14 b. What is the yield to maturity of the coupon bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Yield to maturity 6.66 % c. Under the expectations hypothesis, what is the expected realized compound yield of the coupon bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Realized compound yield % d. If you forecast that the yield curve in 1 year will be flat at 8.0%, what is your forecast for the expected rate of return on the coupon bond for the 1-year holding period? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Holding period return %

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