Question: Need proper formulas written before inserting values Exactly one year ago today (say 10/10/12), the prices on zero-coupon US treasury bonds were as follows: The

Need proper formulas written before inserting values

Need proper formulas written before inserting values Exactly one year ago today

Exactly one year ago today (say 10/10/12), the prices on zero-coupon US treasury bonds were as follows: The current (i.e., 10/10/13) prices are as follows: If the market is risk neutral, what was the market predicting the one-year rate would be on 10/10/13? If the market is risk neutral, what was the market predicting the two-year rate would be on 10/10/13? If you bought a 2-year zero (with $1000 in face value) on 10/10/12 and sold it one year later on 10/10/13, what was your holding period yield? Given you answer to c, was your holding period yield larger than, smaller than, or equal to the yield to maturity on the 2-year zero when you bought it at 10/10/12? Given the current (10/10/13) yield curve, what is the value of a 4 year 5% coupon bond that pays its coupon once a year (at the end of the year) and has a face value of $1000

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