Question: answer wuestions a,b,c please answer everything on this paper with full explantions and answer please answer a, b and c dont leave any out 1)
answer wuestions a,b,c
please answer everything on this paper with full explantions and answer please answer a, b and c dont leave any out
1) Consider the following zero-coupon yields on default-free securities (10 MARKS): a. What is the price today of a 3-year default-free security with a face value of $1,000 and an annual coupon rate of 6% ? Show all your work. b. How will a 3 -year default-free security with a face value of $1,000 and an annual coupon rate of 6% trade? You should be doing a calculation that will determine the type of trade (i.e. premium, discount, par). c. What is the YTM of a 3-year default-free security with a face value of $1,000 and an annual coupon rate of 6% ? Show all your work
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