Referring to the table of spot rates, answer the following questions: (a) Find the price of...
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Referring to the table of spot rates, answer the following questions: (a) Find the price of a 4 year par value bond with face value $1000 and 5% annual coupons. Also find the annual yield rate of this bond. (b) Find the associated at-par yield rate for the 4-year bond. (c) Find the associated one-year forward rates fo, fi, f2, and f3. Period Spot Rate 1 year 3.5% 2 years 3.9% 3 years 4.2% 4 years 4.4% Referring to the table of spot rates, answer the following questions: (a) Find the price of a 4 year par value bond with face value $1000 and 5% annual coupons. Also find the annual yield rate of this bond. (b) Find the associated at-par yield rate for the 4-year bond. (c) Find the associated one-year forward rates fo, fi, f2, and f3. Period Spot Rate 1 year 3.5% 2 years 3.9% 3 years 4.2% 4 years 4.4%
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