The six-month zero rate is 8% per annum with semiannual compounding. The price of a one-year bond that provides a coupon of 6% per annum semiannually is 97. What is the one-year continuously compounded zero rate? O 9.02% O8.02% O 8.52% O 9.52%
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- 1. What effective interest rate is equivalent to 14 % per year, compounded semi- annually? Answer: i= 14.49% 2. What is the corresponding nominal rate, compounded monthly for an effective rate of 16.5%? Answer: r 15.37%How much willan investment of GH< 20.000 be worth in 10 years at an interest rate of 10%% per annum payable semi-annually? A) GH¢ 54,304.89 B) GH 67,980.98 C) GH¢ 53,065.95 D) GH¢ 69,603.44 E) GH¢ 65,056.59A payment stream consists of a payment of $1600 today, a payment of $2400 in 3 months, and a payment of $2600 in 21 months. What is the fair market value of this payment stream 18 months from today? Assume a compound interest rate of 6.5% compounded quarterly. Today + $1600 FV1 = $ PV3 = $ Start by calculating the following values on the time diagram: FV2 = $ 3 Months The fair market value of this payment stream is: Total = $ Time Value of Money Solver $2400 Enter the given values. 0 N: = 0 Number of Payment Periods 1:% = 0 Annual Interest Rate as a Percent PV: = Present Value PMT: = 0 Payment FV: = Future Value P/Y: 0 12 V Payments per Year C/Y: 12 V Compounding Periods per Year PMT: = END € Solve Solve Solve Solve 18 Months Solve FV2 FV1 + PV3 Total 21 Months $2600
- 3. The 1-year spot rate is 8%p.a. effective. The term structure of 1-year effective forward rates is as follows: at time t = 1 the rate is 7%, at time t = 2 the rate is 6%, at time t = 3 the rate is 5%. (a) Determine the term structure of spot rates. (b) A fixed income security pays £10 annual coupons and it is redeemed after 4 years for £100. Compute its price at time t = 0.A 10-year floating rate (annually paid) security selling for 101.32 pays a rate based on a reference rate plus 50 basis points. Assume the current value of the reference rate is 7%. What is the discount margin?A 10-year floating rate (annually paid) security selling for 101.32 pays a rate based on a reference rate plus 50 basis points. Assume the current value of the reference rate is 7%. What is the discount margin? O +30.94 bps O -309.4 bps O -30.94 bps O +309.4 bps
- Assuming a discount rate of 6%, what is the future value of 100,000 per year for 12 years if the payments occur at the beginning of each period? Question 6 options: $1,619,514 $1,588,474 $1,686,994 $1,805,084 $1,788,214What is the future value of GH¢ 1,200 a year for 40 years at 8 percent interest? Assume annual compounding. #randomized O A. GH¢ 301,115 B. GH¢ 306,492 O C. GH¢ 310,868 OD. GH¢ 342,908 O E. GH¢ 347,267The 1-year spot rate is 8%p.a. effective. The term structure of 1-year effective forwardratesisasfollows: attimet=1therateis7%,attimet=2therate is 6%, at time t = 3 the rate is 5%. (a) Determine the term structure of spot rates. (b) A fixed income security pays £10 annual coupons and it is redeemed after 4 years for £100. Compute its price at time t = 0.
- An interest rate is 12% APR when measured using semiannual compounding. What is the equivalent rate when measured using continuous compounding? How much will $100 grow to in 3 years if it's invested at 12% APR with semiannual compounding? Is that more, less, or the same as it will grow to over the same period using the continuously compounding equivalent rate? 11.33 %; $140.49; same 11.65%; $141.85; same 11.33%; 140.49; less 11.65% ; 141.85; less 11.33%; 140.49; less. You selected th1. Determine the discount rate assuming the PV of $1080 at the end of 1-year is $980? 2. $9,800 is deposited for 10 years at 6% compounded annually, determine the FV? 3. What will be the present value, if $6,800 is discounted back 4 years at an interest rate of 4% compounded semi-annuallyWhat is the future value of $4,500 after 6 years if the nominal interest rate is 8.50% compounded semiannually? Group of answer choices $7,415.24 $7,341.60 $7,934.31 $8,156.77 $7,637.70