Estimate the price and yield of a two-year bond

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Reference no: EM131404145

The following table gives the prices of bonds:

a. Calculate zero rates for maturities of 6 months, 12 months, 18 months, and 24 months.

b. What are the forward rates for the periods: 6 months to 12 months, 12 months to 18 months, 18 months to 24 months?

c. What are the 6-month, 12-month, 18-month, and 24-month par yields for bonds that provide semiannual coupon payments?

d. Estimate the price and yield of a two-year bond providing a semiannual coupon of 7% per annum.

Reference no: EM131404145

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