please answer the year 2 forward rate On March 11, the existing or current (spot) 1-, 2-, 3-, and 4-year zero-coupon Treasury security rates were as follows:1R10.608, 1821.258, 1R3 1.658, 1R4 - 1.80%Using the unbiased expectations theory, calculate the 1-year forward rates on zero-coupon Treasury bonds for years 2, 3, and 4 as ofMarch 11. (Do not round intermediate calculations. Round your answers to 2 decimal places.)Answer is complete but not entirely correct.Forward rates1.852.452:25Years234%%%

1 year forward rate for year 2 = whereR2 = Treasury security rate for 2nd yearR1 = Treasury…

Answered: please answer the year 2 forward rate

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

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Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EB: Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual...

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Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual coupon (payable June 30 and December 31) on January 1, 2018, when the market rate of interest was 10%. Were the bonds issued at a discount or premium? Assuming the bonds sold at 92.288, what was the sales price of the bonds?
On March 11, 20XX, the existing or current (spot) one-year, two-year, three-year, and four-year zero-coupon Treasury security rates were as follows: 1R1 = 4.75%, 1R2 = 4.95%, 1R3 = 5.25%, 1R4 = 5.65% Using the unbiased expectations theory, calculate the one-year forward rates on zero-coupon Treasury bonds for years two, three, and four as of March 11, 20XX.
On March 11, the existing or current (spot) 1-, 2-, 3-, and 4-year zero-coupon Treasury security rates were as follows:1R1 = 0.75%, 1R2 = 1.35%, 1R3 = 1.75%, 1R4 = 1.90%Using the unbiased expectations theory, calculate the 1-year forward rates on zero-coupon Treasury bonds for years 2, 3, and 4 as of March 11. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Years Forward rates 2 % 3 % 4 %
On Jan 15, 20XX, the existing or current (spot) one-year, two-year, three-year, and four-year zero-coupon Treasury security rates were as follows: R1= 5.25%, R2 = 5.50%, R3 = 5.75%, R4 = 6.25% Calculate the one-year forward rates on zero-coupon Treasury bonds for years two, three, and four as of Jan 15, 20XX.
The following information is about the spot rates on Treasury securities and BBB corporate bond: Spot 1 Year Spot 2 Year Spot 3 Year Treasury 3% 4.75% 5.5% BBB Corporate Debt 7.5% 9.15% 10.5% Question: Using the implied forward rates, estimate the annual marginal default probability for the one-year BBB corporate debt in year 3?
assume that the following data on U.S. Treasury securities is current: Years to maturity Yield to maturity 1 0.800% 2 0.910% 3 1.300% 4 1.350% 5 1.800% 7 2.100% 10 2.800% 20 4.200% According to the term structure, what would you have to pay for a $1000, zero-coupon, Treasury bond that…
If the following quotes are on September 15, 2012, what was the coupon rate for the JD.VR bonds with $1,000 face values and semiannual payments? Company (Ticker) Coupon Maturity Last Price Last Yield $ Vol. (000s) Jim Doe (JD.VR) ? Sep 15, 2040 123.55 8.8 7,059 (Do not include the percent sign (%).Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
You observe the following prices of Treasury securities per $100 of par value: • a 6-month T-bill sells for 96.1538 • a 1-year T-bill sells for 94.2596 • a 1.5-year 10% coupon T-bond sells for 104.9142 Assume that the pure expectations theory of the term structure holds. a.) Calculate the 6-month, 1-year, and 1.5-year spot rates on a bond-equivalent yield basis.
Suppose that the current one-year rate and expected one-year T-bill rates over the following three years (i.e., year 2, 3, and 4, respectively) are as follows: 1R1 = 5%, E(2r1)=6%, E(3r1)= 7%, E(4r1)=7.5% Using the unbiased expectations theory, calculate the current rates for three-year and four-year Treasury securities.
The following is a list of prices for zero-coupon bonds of various maturities. Maturity (years) Price of Bond 1 $ 953.40 2 903.47 3 852.62 4 787.66 Required: Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments.
All the securities below have annual payments. [Do not round interim calculations] Security Rating Maturity (yrs) Face Value Coupon Price T-Bill 1 $1,000 0% $982.33 T-Note 5 $1,000 2.40% $992.44 T-Bond 10 $1,000 3.25% $1,005.53 T-Bond 20 $1,000 3.90% $1,002.26 Corp Bond BBB 5 $1,000 3.80% $944.55 Corp Bond AA 10 $1,000 3.40% $968.12 Corp Bond A 20 $1,000 5.10% $982.35 What price would you pay for a 5-year, A bond with a coupon rate of 2.70%, a $1,000 Face Value and annual payments? 1. $958.32 2. $945.39 3. $1,001.33 4. $1,09.56 5. None of the above
The following are the current coupon yields to maturity and spot rates of interest for six U.S. Treasury securities. Assume that all securities pay interest annually. Yields to Maturity and Spot Rates of Interest Term to Maturity (yrs) Current Coupon Yield to Maturity (%) Spot Rate of Interest (%) 1-yr Treasury 5.25% 5.25% 2-yr Treasury 5.75% 5.79% 3-yr Treasury 6.15% 6.19% 5-yr Treasury 6.45% 6.51% 10-yr Treasury 6.95% 7.10% 30-yr Treasury 7.25% 7.67% Compute the 2-year implied forward rate three years from now, given the information provided in the preceding table. State the assumption underlying the calculation of the implied forward rate.

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