Calculate the f32 forward rate

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Calculate the F3,2 forward rate* given the rates shown below:

Tenor

Zero Rate

1

.00125

2

.00675

3

.00875

4

.01125

5

.01320

*That is the 2year rate, starting in 3 years time.

 A 5-year, annual pay 3% coupon bond is trading at a dollar price of $98.125. What is the bond's approximate yield to maturity?

Assume the following term structure. Solve for the 1, 2, and 3 year zero rates.

Tenor

Par Rate

Zero Rate

1

.03

 

2

.035

 

3

.03625

 

Reference no: EM133068697

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