Fixed income securities

Assignment Help Finance Basics
Reference no: EM13672225

Fixed Income Securities.

Consider a long position in a 6-month forward contract on a 1-year coupon bond with a 8% quarterly coupon. (Note: The bond has 1-year to maturity as of t=0). Assume a face value of $1 million. Use the discount factors for August 15, 2000 in Table 5.9 to find the forward price at t=0. Assume delivery would occur just after the coupon at t=0.5 has been made. Now assume that 3-months have gone by (i.e. it is now November 15, 2000).See table 5.9 for the Nov. 15th discount factors. What is the value of the original forward contract now?

Can you please show your calculations. Thank you.

Table 5.9
Maturity z(0,t)
0.25 0.9844
0.50 0.9690
0.75 0.9531
1.00 0.9386

Reference no: EM13672225

Questions Cloud

Explain why the common stock investor demands : Explain why the common stock investor demands a higher dividend rate.
What is the bond price : What is the bond's price if comparable debt yields 12%?
What is the one year rate three years from now : What is the one year rate three years from now?
Find an article about a current event : Find an article about a current event that discusses a change in the supply or demand of a product.
Fixed income securities : Fixed Income Securities.
Briefly explain why the bernoulli process assumptions : Briefly explain why the Bernoulli process assumptions and what is the probability that all three 20 ml samples will show 0 or 1 bacteria?
What is the dark side of self-esteem : What is the dark side of self-esteem?
Compute a z statistic : Compute a z statistic for each of the following, assuming the population has a mean of 100 and a standard deviation of 20: A sample of 43 scores has a mean of 101.
Middle and late childhood : Middle and Late Childhood

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the firms p/e ratio

The stock of North American Dandruff Company is currently selling at $80 per share. The firm pays a dividend of $2.50 per share.

  Find the depreciation charge each year

Doug bought a new car for $40,000 that will be depreciated using the MACRS depreciation scheduale for a 5-year period.

  Diagram the expanded dupont system for hunter for 2006

Diagram the expanded DuPont system for Hunter for 2006. Insert the appropriate dollar amounts wherever possible. c. Use the Du Pont system to calculate the return on assets for the two years, and determine why they changed.

  Computation of future contract value

Computation of future contract value and what is the farmer's net proceeds when corn is sold

  Describe the difference between secured and unsecured

working capital is money to be used for daily operations and any debt that a company may have.nbsp who should be making

  Roi analysis using dupont model

Charlie's Furniture Store has been in business for several years. The firm's owners have described the store as a high-price, highservice?

  What would the annual increase in value on the certificate

Suppose that in 2010, a $10 silver certificate from 1898 sold for $11,200. For this to have been true, what would the annual increase in value on the certificate have been?

  What percentage of the payment represents interest

What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Round all answers to the nearest hundredth.

  The company goes ahead with the recapitalization plan

The company goes ahead with the recapitalization plan?

  What are the cash flows associated with the project

However, the clinic has to py the organizers of the exposition a fee for the marketing value of the opportunity. this fee, which must be paid at th end of the second year, is $2 million.

  What is the percentage change in the price for each bond

What is the percentage change in the price for each bond after the decline in interest rates? Fill in the following table. Round your answers to two decimal places.

  Cost of preferred stork your firm is planning to issue

cost of preferred stork your firm is planning to issue preferred stock. the stock sells for 115 however if new stock is

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd