Solved: 2 the current zero coupon yield curve for risk free bonds, Finance Basics

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2 the current zero coupon yield curve for risk free bonds

1. Suppose a 10 year, $1000 bond with an 8.6% coupon rate and semiannual coupons is trading for $1034.66

a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding?)

b. If the bond's yield to maturity changes to 9.3% APR, what will be the bond's price?

2. The current zero coupon yield curve for risk free bonds is as follows:

Maturity (Years) 1 2 3 4 5

YTM 5.02% 5.51% 5.79% 5.92% 6.02%

What is the price per $100 face value of a 2 year, zero coupon, risk-free bond?

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Finance Basics: 2 the current zero coupon yield curve for risk free bonds

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Finance Basics: 2 the current zero coupon yield curve for risk free bonds

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