n = 10 r0,0 = 5% u = 1.1 d = 0.9 q = 1 - q = ½ Compute the price of a zero-coupon bond (ZCB) that matures at time t=10 and that has face value 100.

= = Problem 2 Currently the yield curve observed in the market is as follows: yı 6%, Y2 = 7%, and yз 9%. You are choosing between a two-year and three-year maturity bonds all paying annual coupons of 8%, once a year. You strongly believe that at the end of year 1 the yield curve will become flat at 9%. (1) Which bond (and why) should you buy if you plan to close out your position in one year right after receiving the coupon payment? (2) Suppose that you can either invest in a two-year bond described above, or invest in a 1-year bank deposit with an annual interest rate of 6%. As in (a), your investment horizon is 1 year. Which option would you choose and why?

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Assume that the risk-free rate (i.e., Rf) is 2.8%. If, for a particular company bond issue, the default risk premium (i.e., DP) is 3.1%, the maturity risk premium ( i.e., MP) is 0.9%, and the market risk premium ( i.e., MRP) for that company's stock is 12.9% what is the required rate of return for the company's fixed income securities ? Record your answer as a percent , rounded to one decimal place , but do not include a percent sign in your answer . For example , enter 0.1578658 = 15.78625% as 15.8 .

On a Financial Calculator N=10,IY=6,PMT=25,FV=1,000 PV =1000 5X2=10 12/2=6% 1,000X0.05X0.5=25 What am I doping wrong?

D6) Finance What is the OAS on the MBS with the following characteristics: 1. Coupon rate: 9.5% 2. Current market price: 97.75 3. Forward rate at T=0, 1.95%, Forward rates at T=1 +/- 75bps from T=0 rate, Forward rates at T=2 6%, 4%, and 4% from top to bottom of the forward rate tree Submit your response in X.XXX% out to 3 decimals.

A bond that pays interest semiannual has a price of 981.45 and semiannual coupon payment of 28.50.  If the par value is 1000.  What is the current yield?

n = 10 r0,0 = 5% u = 1.1 d = 0.9 q = 1 - q = ½ Compute the initial price of a zero-coupon bond (ZCB) that matures at time t=4 and that has face value 100. (Note the answer is not 82.27)

Assume the​ zero-coupon yields on​ default-free securities are as summarized in the following​ table:   Maturity 1 year 2 years 3 years 4 years 5 years ​Zero-Coupon Yields 7.00​% 7.60​% 7.90​% 8.30​% 8.70​%   What is the maturity of a​ default-free security with annual coupon payments and a yield to maturity of 7.00%​? ​Why? What is the maturity of a​ default-free security with annual coupon payments and a yield to maturity of 7.00%​?   A. One year   B. Two years   C. Three years   D. Four years   E. Five years

29. Consider two fixed coupon bonds with the same maturity 10Y and same face value F = 100. Bond 1 pays yearly coupons with coupon rate C₁ = 5% and bond 2 has coupon rate C₂ = 7%. Which of the two bonds has a larger duration? (a) Bond 1. (b) Bond 2. 30. Consider two exchange rates X/Y and Z/Y. (For example EUR/USD and JPY/USD.) They both follow perfectly correlated geometric Brownian motions with parameters (μ1,01) and (μ2, 02). Does the cross-exchange rate X/Z (for example EUR/JPY) also follows a geometric Brownian motion? (a) Yes (b) No