What is the piece of three-year bond with face value

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1. The yield curve shows that the one-, two-, and three-year interest rates are 4.0%, 6.1% and 7.6%, respectively. What is the piece of a three-year bond with a face value of 700 and coupons of 14% paid annually?

2. Put-Call Parity states: c + Xe -rT = p + S0 What is the implication if this relationship does not hold? (10) Show diagrammatically that put-call parity must hold.

3. Osborn corporation currently does not pay any dividend. Analysts expect taht the company will pay its first dividend of $5 per share at the end of year 4. After that, the company will continue to pay this dividend at the end of each year for the foreseeable future. What it the value of the stock today if the required rate of return is 10%?

Reference no: EM131886886

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