Today is t=0.5. Compute the present value of the forward contract to purchase a 1.5-year zero coupon bond, a year from t=0. We know that today's forward price is 94. At t = 0 and t=0.5, we have the following discounts: T Z(0,T) | Z(0.5,T) 0.5 0.968 1 1.0 0.936 0.970 1.5 0.904 0.952 2.0 0.873 0.921 2.5 0.8445 0.892 3.0 0.8175 0.854 3.5 0.7924 0.821 4.0 0.7691 0.798

Today is t=0.5. Compute the present value of the forward contract to purchase a 1.5-year zero coupon bond, a year from t=0. We know that today's forward price is 94. At t = 0 and t=0.5, we have the following discounts: T Z(0,T) | Z(0.5,T) 0.5 0.968 1 1.0 0.936 0.970 1.5 0.904 0.952 2.0 0.873 0.921 2.5 0.8445 0.892 3.0 0.8175 0.854 3.5 0.7924 0.821 4.0 0.7691 0.798

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 4MC

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