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Unformatted text preview: 8%, what would your annual total rate of return on holding the bond be for that year? Explain. 3. The following zero coupon bonds are currently actively traded in the bond market (all have a face value = $1000): Maturity (years) Price 1 909.09 2 811.62 3 711.78 4 635.52 Calculate the yield to maturity for each of these 4 bonds. What is the term structure of interest rates implied by these prices? 4. What is the duration of a bond trading at $1,000 (meaning it is trading at face value or at par) if its coupon rate is 8% and has a remaining time to maturity of 5 years?...
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This note was uploaded on 10/11/2011 for the course FBE 441 taught by Professor Callahan during the Fall '07 term at USC.
- Fall '07