Question: only answers Please, I don't need solution steps. 1)Assume that the following data on U.S. Treasury securities is current: Years to maturity Yield to maturity
only answers Please, I don't need solution steps.
1)Assume that the following data on U.S. Treasury securities is current: Years to maturity Yield to maturity 1 0.800% 2 0.910% 3 1.300% 4 1.350% 5 1.800% 7 2.100% 10 2.800% 20 4.200% According to the term structure, what would you have to pay for a $1000, zero-coupon, Treasury bond that matures in ten years?
2) Deborah has built a very profitable business, and she credits the entrepreneurship program at her alma mater for a lot of her success. She would like to donate money to her old school to help one worthy graduate each year establish his or her own business. She will donate the money today, with the understanding that the first award will go to a graduate of this years junior class. (That is, the first award will be made two years from now.) Her alma mater is able to invest the funds at a constant, annual, tax -free rate of 7%. How much must her donation need be if she would like for the annual award to be $75000 a year and wants the program to continue forever, even after she is no longer around? Round up your answer to the nearest thousand dollar.
a) $1,103,000
b)$1,071,000
c)$1,002,000
d)$1,147,000
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