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- what is the rate of return from t to t+1 on abond that is priced at 2,000 initially, provides a coupon paymentat time t+1of 40$ and has its price rise to 2,100 at time t+1What is the discount yield, bond equivalent yield, and effective annual return on a $1 million Treasury bill that currently sells at 93.375 percent of its face value and is 70 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161)) Discount yield Bond equivalent yield Effective annual return % % %4. Let R be the one-year LIBOR rate with annual compounding that will be determined in 6 years from now. Assume the forward interest rate volatility for the corresponding period is 20% per year. The risk-free rates with annual compounding are currently 5% for all maturities. a. Calculate the price of a financial derivative that pays 1000R € in 6 years from now. b. Calculate the price of a financial derivative that pays 1000R € in 7 years from now.
- Calculate the fair present value of the bond which makes coupon paymentssemiannually and has a nominal value of $1000 and has a 12 years remaining to maturity and which has a required rate of return of 10 percent. coupon rate=10Assume the first-year, second-year, third-year, and fourth-year hazard rates are 1.5%, 2%, 2.5%, and 3%, respectively. Compute the expected loss on a 4-year $100 par value 6% coupon rate payable annually bond. Please use a recovery rate of 40%.Suppose an investor purchases $114,000 of TIPS with a 6.14% coupon rate and 12 years until maturity. How much with the second coupon payment be if the level of CPI adjusts to the levels below? Today 6 months from now 12 months from now 18 months from now 228 246.2 256.1 265.5
- Assume that a 5-month forward contract on a zero-coupon bond with marketface value of Php5,000 and is currently trading at Php4,777. Suppose thatthe annual risk-free interest rate is 6.28%, How much is the arbitrage profit?assume that forward rates for the next 2 years are given by: r(0.5)=6%, r(1)=7%; r(1.5)=8% and r(2)=9%. In addition, the price of a 7% coupon bond maturing 2.5 years from now is equal to $101 and the price of a 6% coupon bond maturing 3 years from now is equal to $99 (c) Find the 2.5-year spot rate r (2.5). Keep at least 6 decimal digits while doing calculations and reporting the answer. d) Find the 3-year forward rate r(3). Keep at least 6 decimal digits while doing calculations and reporting the answer.A gilt with a face value of £100 and 2 years to maturity pays a 6% annual coupon. It is quoted at a price of £99.09. What is its yield to maturity (YTM)? Present Value Table Present value of 1 i.e. (1 + r)–n Where r = discount rate n = number of periods until payment Periods Discount rate (r) Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%1 0.990 0.980 0.971 0.962 0.952 0.942 0.933 0.923 0.914 0.9052 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.8263 0.971 0.942 0.914 0.887 0.861 0.837 0.813 0.790 0.768 0.7464 0.961 0.924 0.888 0.853 0.819 0.786 0.754 0.723 0.693 0.6655 0.951 0.888 0.837 0.789 0.747 0.708 0.672 0.636 0.603 0.5736 0.942 0.853 0.789 0.735 0.681 0.630 0.582 0.537 0.495 0.4567 0.933…
- Suppose that you purchased a Baa rated $1000 annual coupon bond with a 3.8% coupon rate and a 10-year maturity at 2% above par value. What would the current yield (in %) be at the time of purchase (4 digits)?Standard Chartered Bank issues a certificate of deposit with a face value of USD 7 million, a term of 280 days and a coupon rate of 6.2%. You then sell this CS when it has only 122 days left until maturity, on a quote of 5.05/5.10%. At what amount will it be sold?Use the following information to answer questions 1 - 4. A 5-year 8% annual coupon bond yields 7%. Question 1 The price quoted in the paper is Question 2 The current yield is Question 3 The yield to maturity is Question 4 .%. .%. If you buy $25,000 face value, each coupon cash flow will be $..