Solution-What are the 4 spot rates or zero yields

What are the 4 spot rates or zero yields

Reference no: EM133069088

For this question, assume annual compounding. The following is a list of prices for zero-coupon bonds with different maturities and par value of $1,000.

Maturity (Years) Price

1 $943.40

2 $881.68

3 $808.88

4 $742.09

(a) What are the 4 spot rates or zero yields?

(b) What is the price of a $1000-par, 4-year maturity bond with a 12% coupon rate paid annually?

(d) What is the price of the bond in the previous problem expected to be a year from today? (Hint: An investor must earn the one-year rate during the first year).

Reference no: EM133069088

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What are the 4 spot rates or zero yields

Reference no: EM133069088

Reference no: EM133069088

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