This preview shows page 1. Sign up to view the full content.
Unformatted text preview: interest on the loan. Can you offer him this deal without destroying value for your bank? 3. Compute the year-1 and year 2- spot rates given the bond prices of two government bonds. Both bonds offer a coupon rate of 5%. The bond with one year maturity trades at 100, the two year bond trades at 98.2115. Assume annual coupon payments. Answer to #3: ____________________ Name: ________________ SID # : ________________ Section Number _________ Answer to #1: ____________________ Answer to #2: ____________________...
View Full Document
This note was uploaded on 10/02/2009 for the course UGBA 08547 taught by Professor Odean during the Spring '09 term at University of California, Berkeley.
- Spring '09