First part of question the answer is 4.3%   Also calculate this but also calculate with coupon of 5% for Bond a and 6% for Bond B.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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First part of question the answer is 4.3%

 

Also calculate this but also calculate with coupon of 5% for Bond a and 6% for Bond B.

 

Spot and Forward rates
Bond
Bond A
Bond B
Face Value Coupon
100
100
0%
0%
Maturity
1
3
Price
98
90
Calculate the annual forward rate betwenn the years 1 and 3
Transcribed Image Text:Spot and Forward rates Bond Bond A Bond B Face Value Coupon 100 100 0% 0% Maturity 1 3 Price 98 90 Calculate the annual forward rate betwenn the years 1 and 3
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