You noticed that the price of a 7-year 6% coupon bond is $106 and the price of a 10-year 8% coupon bond is $119. All bonds have $100 face values.

a) Find 7-year forward interest rate. Keep at least 6 decimal digits for all calculations!!!

b) Find the price of a 7-year 9% coupon bond with a $100 face value.

Answer rating: 100% (QA)

To find the 7year forward interest rate we can use the relationship between bond prices and yields a ... View the full answer