Consider a zero-coupon bond with a face value of $60 and five years to maturity. Compute its current fair value at t=0. (only one possible answer) $55.00 $ 57.09 $58.09 $60.00 $100.00 b.  Consider a zero-coupon bond with a face value of $60 and five years to maturity. Compute its DV01 at t=0. (only one possible answer)

Personal Finance
13th Edition
ISBN:9781337669214
Author:GARMAN
Publisher:GARMAN
Chapter14: Investing In Stocks And Bonds
Section: Chapter Questions
Problem 6DTM
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a. Consider a zero-coupon bond with a face value of $60 and five years to maturity. Compute its current fair value at t=0.

(only one possible answer)

  • $55.00
  • $ 57.09
  • $58.09
  • $60.00
  • $100.00

b.  Consider a zero-coupon bond with a face value of $60 and five years to maturity. Compute its DV01 at t=0.

(only one possible answer)

  • $0.0098
  • $0.0500
  • $0.0283
  • $0.0471
  • $0.6000
Maturity in
years
1
23456789
9
10
Zero-coupon rate
0.60%
0.70%
0.80%
0.90%
1.00%
1.10%
1.20%
1.30%
1.40%
1.50%
Transcribed Image Text:Maturity in years 1 23456789 9 10 Zero-coupon rate 0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% 1.40% 1.50%
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