Use this information to find the forward rate on a security

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Reference no: EM131878267

A bond with a face value of $1,000 has annual coupon payments of $80 and was issued 15 years ago. The bond currently sells for $1,000 and has 10 years left to maturity. This bond's _______________ must be 8%.

I. yield to maturity

II. current yield

III. coupon rate

a. I only

b. I and II only

c. III only

d. II and III only

e. I, II and III

2. Assume that as of today the annualized rate on a two year security is 13%, while the annualized interest rate on a one year security is 9%. Assuming that interest is compounded, use this information to find the forward rate on a security with a maturity of one year one year from now.

A) 17.00%

B) 17.15%

C) 16.85%

D) 5.00%

E) 5.14%

Reference no: EM131878267

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