The current price of a 6-month zero coupon bond

Assignment Help Finance Basics
Reference no: EM13847796

Need detailed calculations for the following:

The current price of a 6-month zero coupon bond with a face value of $100 is 97.92. If a 9-month strip with a face value of $100 is currently trading for 96.62, find the forward interest rate for the 6 to 9 month period.


Solve by both continuous compounding and quarterly compounding for the following:

1. Six-month spot interest rate for quarterly compounding.
2. Nine-month spot interest rate for quarterly compounding. 
3. Forward rate (6 to 9 months) for quarterly compounding. 
4. Six-month spot interest rate for continuous compounding. 
5. Nine-month spot interest rate for continuous compounding. 
6. Forward rate (6 to 9 months) for continuous compounding. 
7. What is the guaranteed fair price of a 3-month T-Bill to be delivered at 6 months from now, assuming quarterly compounding? 
8. What is the guaranteed fair price of a 3-month T-Bill to be delivered at 6 months from now, assume continuous compounding?

Reference no: EM13847796

Questions Cloud

What is the correlation coefficient & how strong is it : What is the correlation coefficient & how strong is it
American attitudes and lifestyles : Discuss the impact of each of the following on American attitudes and lifestyles. Examine the problems associated with American cities of the late nineteenth century, and evaluate the responses to those problems.
Should the saying all is fair in love and war : Should the saying "all is fair in love and war" apply to competitive intelligence? Why do you think so
Explain how the implementation project will be organized : Explain how the implementation project will be organized and staffed and the level of commitment at all levels from Management and Directors to workers;?
The current price of a 6-month zero coupon bond : Need detailed calculations for the following:The current price of a 6-month zero coupon bond with a face value of $100 is 97.92. If a 9-month strip with a face value of $100 is currently trading for 96.62, find the forward interest rate for the 6 to ..
Hinder meaning and free of plagiarized material : The project should be clear, coherent, and well organized. It should be free of errors that hinder meaning and free of plagiarized material.
Formulate a linear programming model : Formulate a linear programming model
Present value of a perpetuity making quarterly payments : A business borrows $297,268 for 12 years at an annual rate of interest of 7.4%. If payments are annual and the loan will negatively amortize by $45,318, what will be the annual payment required? Put your answer in as a positive number. What is the pr..
What is the factorys present value : A factory forecasts to produce the following cash flows: If the cost of capital is 6%, what is the factory's present value?

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the percentage appreciation or deprecation

By this year the U.S. dollar value of an Australian dollar was $.7056, the Mexican peso was $.0867, and the British pound was $1.8203. Calculate the percentage appreciation or deprecation of each three currencies between last year and this year.

  Identifying and managing risk

In this assignment, you will compare and evaluate risk management techniques from experts in the field. Go to the Ashford University Library and find one article by Dr. James Kallman. Dr. Kallman, an expert in the field of risk management, has wri..

  Norwood corp currently has accounts receivable of 1223675

norwood corp. currently has accounts receivable of 1223675 on net sales of 6216900. what are its accounts receivable

  What is the present value of this liability

If the relevant discount rate is 8 percent, what is the present value of this liability?

  Find highest growth rate of earning

Calculate a recent 5 years average of the following ratios for three corporations of your choice attempt to select diverse firms.

  Computation the amount of each coupon payment

Computation the amount of each coupon payment  and A bond has a par value of $1000 and a current yield of 6.452 percent

  Time value of money-present value

Evaluate the three alternative bonus plans. Sally can earn a 6% annual return on her investments. Which option should she take. Please show all calculations to support your answer.

  What is its future value

An investment will pay $200 at the end of each of the next 3 years, $400 at the end of Year 4, $500 at the end of Year 5, and $700 at the end of Year 6. If other investments of equal risk earn 10% annually, what is its present value? what is its f..

  What is the exercise value of the call option

A call option on the stock of Bedrock Bolders has a market price of $7. the stock sells for $30 a share, and the option has a strike price of $25 a share. What is the exercise value of the call option? What is the option's time value?

  Analyze the impact of a declining world economy

Analyze the impact of a declining world economy on global trade in terms of gross domestic product of leading nations, price, and the opportunity for free trade.

  Abc corp issued a 12 20-year coupon rate bond 5 years ago

abc corp. issued a 12 20-year coupon rate bond 5 years ago. interest rates are now 8. based on semi-annual analysis

  Determine whether a bank has adequate capital

Explain how the value at risk (VaR) method can be used to determine whether a bank has adequate capital.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd