Treasury coupon bond yield

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1. The current yield on a 1 year treasury bond is .91% and the current yield on a 2 year treasury bond is 1.36%. What is the expected yield on a 1 year treasury bond, 1 year from today (forward rate)? Use 100 par value in calculation.

2. Find the spot rate for a theoretical 2 year zero coupon bond using the following par value yield curve. Use 100 par value in calculation.

6 Month T-bill rate (observed) = .50%

1 Year T-bill rate (observed) = .75%

1.5 Year T-note rate (calculated) = 1.10%

2 Year T-note rate (calculated) = 1.65%

3. The 3 year on the run treasury coupon bond yield is 1.45%. The 5 year on the run treasury coupon bond yield is 2.40%. Using linear extrapolation, what would be the 4 year treasury coupon bond yield on the par yield curve? Use 1000 par value in calculation.

Reference no: EM133117303

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