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2 The following is a list of prices for zero-coupon bonds of various maturities. nts a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete and correct. Maturity (Years) Price of Bond YTM 1 $ 983.40 1.69 % 2 $ 918.47 4.34 ( % 3 $ 867.62 4.85 % 4 $ 774.16 6.61 % b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (years) 1 2 3 Price of Bond $ 983.40 918.47 867.62 774.16 Answer is complete but not entirely correct. Maturity (Years) Price of Bond Forward Rate 2 $ 918.47 7.06% 3 S 867.62 5.07% 4 $ 774.16 12.18 % 2 The following is a list of prices for zero-coupon bonds of various maturities. nts a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete and correct. Maturity (Years) Price of Bond YTM 1 $ 983.40 1.69 % 2 $ 918.47 4.34 ( % 3 $ 867.62 4.85 % 4 $ 774.16 6.61 % b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (years) 1 2 3 Price of Bond $ 983.40 918.47 867.62 774.16 Answer is complete but not entirely correct. Maturity (Years) Price of Bond Forward Rate 2 $ 918.47 7.06% 3 S 867.62 5.07% 4 $ 774.16 12.18 %
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b To calculate the forward rate we can use the formula 1 rnn 1 rmm1 fnmnm Where ... View the full answer
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