Consider the following par bond (ie coupon rate=yield): Maturity: 1 2 3 4 5 YTM: 5%; 4.5%;
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Question:
Consider the following par bond (ie coupon rate=yield):
Maturity: 1 2 3 4 5
YTM: 5%; 4.5%; 4%; 3.5%; 3.2%
1. Calculate discount factor for all 5 years
2. Calculate spot rates for all 5 years
3. Calculate forward rates for all 5 years
4. Price a 5 year 10% coupon bond. What is the YTM for the bond.
5. Price a 5 year 2% coupon bond. What is the YTM for the bond.
Expert Answer:
Answer rating: 100% (QA)
Discount 1 Maturity YTM factor 1 500 0952380952 2 450 0915729951 3 400 08... View the full answer
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