Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN: 9780357033609
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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You are given the following information:
The price of a one-year zero coupon bond with par value of $100 is $96.35.
• The second year 1-year forward rate is 7%.
The second year 2-year forward is 9%.
Calculate the price of a 3-year bond with par value of $100 and 5% annual coupons.
(A) $93.0
(B) $94.5
(C) $96.5
(D) $97.5
(E) $99.0
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Transcribed Image Text:You are given the following information: The price of a one-year zero coupon bond with par value of $100 is $96.35. • The second year 1-year forward rate is 7%. The second year 2-year forward is 9%. Calculate the price of a 3-year bond with par value of $100 and 5% annual coupons. (A) $93.0 (B) $94.5 (C) $96.5 (D) $97.5 (E) $99.0
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Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning