Consider the following: today's interest rate for a 15-year bond is 8%; today's interest rate for a 4-year bond is 4%; the interest rate for a 5-year bond, expected in 4 years is 5%. Find the interest rate for a 6-year bond expected in 9 years. Use the arithmetic or simple average approach. Make sure to express your answers as a percentage.
Consider the following: today's interest rate for a 15-year bond is 8%; today's interest rate for a 4-year bond is 4%; the interest rate for a 5-year bond, expected in 4 years is 5%. Find the interest rate for a 6-year bond expected in 9 years. Use the arithmetic or simple average approach. Make sure to express your answers as a percentage.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter11: Bond Pricing And Amortization (bonds)
Section: Chapter Questions
Problem 7R
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Consider the following: today's interest rate for a 15-year bond is 8%; today's interest rate for a 4-year bond is 4%; the interest rate for a 5-year bond, expected in 4 years is 5%. Find the interest rate for a 6-year bond expected in 9 years. Use the arithmetic or simple average approach. Make sure to express your answers as a percentage.
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