Consider three securities that will pay risk-free cash flows over the next three years and that have the current market prices shown here: Security Name Price Today ($) Cash Flow in Cash Flow in Cash Flow in One Year ($) Two Years ($) Three Years ($) B1 $92.42 100 B2 $84.32 100 500 B3 $382.92 Calculate the no-arbitrage price, or the price that eliminates any arbitrage opportunities, of a new security, B4, that pays risk-free cash flows of $500 in one year and $1,000 in three years. The current no-arbitrage price of Security B4 is:

A non-dividend paying asset is current priced at $25 and the risk-free interest rate is 8% per annum. Today, you enter into a six-month futures contract to buy a unit of this asset. Three months from now the underlying price has fallen to $18 (but note that the interest rate has not moved). Which of the answers below is closest to the fall in the futures price? Use discrete discounting. Question 7Answer a. $6.50 b. $5.50 c. $7.50 d. $4.50

Use the following information to answer.  Coupon Payments are annual unless otherwise indicated!     Years Face Coupon Market Security Rating Maturity Value Rate Price Treasury   1  $    1,000 0.00%  $         965.00 Treasury   3  $    1,000 1.90%  $         939.06 Treasury   5  $    1,000 4.30%  $         932.42 Treasury   10  $    1,000 6.80%  $      1,007.12 Treasury   15  $    1,000 6.60%  $         908.25 Corp A A 5  $    1,000 8.10%  $         990.00 Corp B BB 10  $    1,000 7.90%  $         859.88 Corp C AA 15  $    1,000 7.00%  $         660.00   What is the default risk premium for a BB debt security (round to two places)

Fixed Income Securities4. Today is t = 0. You have just bought a five-year zero-coupon Treasurybond with $100 face value. You paid $80.(a) What is the annually compounded yield to maturity on the bond?(b) Suppose that yields at all maturities decrease to 2% immediately after you havepurchased the bond. Calculate the annualized holding period return if you sellthe bond one year after you have purchased it, at t = 1.(c) What is the annually compounded yield to maturity on the bond at t = 1?

You find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Rate ?? 6.152 6.153 Maturity Month/Year May 35 May 38 May 44 Bid 103.4586 104.4926 ?? Yield to maturity Asked 103.5314 % 104.6383 ?? Change Ask Yield +.3274 5.959 ?? 3.991 In the above table, find the Treasury bond that matures in May 2038. What is your yield to maturity if you buy this bond? Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. +.4269 +.5379

you are considering investing in a four year security which pays 6,000 in one year. 6,000 in two years, 6,000 in 3 years and 17,500 in 4 years. the security currently trades at a price of of 18,483.77.  What is the yield to maturity of the security? What is duration?

Consider a long-term, zero coupon bond that has a face value of $100,000 and matures in thirteen years. If you require a return of 4.52%, what are you willing to pay for the instrument today? $56,286.96 $53,852.81 $95,675.47 $177,661.05

Consider three securities that pay risk free cash flows over the next three years and that have the current market prices shown here Security Price Today (5) Cash Flow in Two Years (5) Cash Flow in Three Years ($) Name 81 82 83 $9268 $84.79 $386 09 Cash Flow in One Year ($) 100 0 0 0 100 0 0 0 500 Calculate the no-arbitrage price, or the price that eliminates any arbitrage opportuntes, of a new secunty 84, that plays risk toe cash flows of $100 in one year and $500 in two years The current no-arbitrage price of Security B4 is: s(round your answer to two decimal places) K