Calculate zero rates for maturities of 6 months

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The following table gives the prices of bonds:

2368_Table 3.jpg

(a) Calculate zero rates for maturities of 6 months, 12 months, 18 months, and 24 months.

(b) What are the forward rates for the following periods: 6 months to 12 months, 12 months to 18 months, and 18 months to 24 months?

(c) What are the 6-month, 12-month, 18-month, and 24-month par yields for bonds that provide semiannual coupon payments?

(d) Estimate the price and yield of a 2-year bond providing a semiannual coupon of 7% per annum.

Reference no: EM131235799

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