The schedule of 1-year forward rate across next 5 years is as follows. Year 1-year Forward Rate 1 4.6% 2 4.9% 3 5.2% 4 5.5% 5 5.8% What should the purchase price of a 4-year zero-coupon bond be if it is purchased today and has face value of $1,000?
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12.
The schedule of 1-year forward rate across next 5 years is as follows.
|
Year |
1-year Forward Rate |
|
1 |
4.6% |
|
2 |
4.9% |
|
3 |
5.2% |
|
4 |
5.5% |
|
5 |
5.8% |
What should the purchase price of a 4-year zero-coupon bond be if it is purchased today and has face value of $1,000?
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