Treasury spot rate

Assignment Help Financial Management
Reference no: EM131051605

Assume the six-month Treasury spot rate is 1.6% APR, and the one-year rate is 2% APR, both compounded semiannually. What is the price of a one-year $1000 par Treasury bond with 2% coupons?

Please show equations & Steps

Reference no: EM131051605

Questions Cloud

Maturity of one year : A company has issued floating-rate notes with a maturity of one year, an interest rate of LIBOR plus 125 basis points, and total face value of $50 million.The company now believes that interest rates will rise and wishes to protect itself by enter..
Project - expand the simulation with a class hierarchy : Project: Expand the Simulation with a Class Hierarchy. Purpose: Expand classes into a hierarchy. Introduce a View to the Model-View-Controller design pattern. Provide more functionality to the simulation
Evaluate various segmentation criteria : Evaluate various segmentation criteria that impact target market selection. Rank the various marketing research techniques and which technique works best for any marketing research project.
Research federal and state legislation : Research federal and state legislation related to child care, parental leave, and elder care benefits for employees. Are specific trends emerging?
Treasury spot rate : Assume the six-month Treasury spot rate is 1.6% APR, and the one-year rate is 2% APR, both compounded semiannually. What is the price of a one-year $1000 par Treasury bond with 2% coupons?
How much pension expense does american express report : American Express discloses the following pension footnote in its 10-K report. How much pension expense does American Express report in its 2005 income statement?
Current yield and capital gains yield : Current yield, capital gains yield, and yield to maturity Hooper Printing Inc. has bonds outstanding with 9 years left to maturity. The bonds have an 9% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to chang..
Present value of these payments : Suppose that you will receive $100 in 4 years (end of year 4) and every even year thereafter (year 6, 8, ...) you will receive a payment that is 5% bigger than the prior payment. What is the present value of these payments assuming the discount ..
What is the yield to call if they are called in five years : Yield to maturity and yield to call Kaufman Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 10% annual coupon payment, and their current price is $1,185. The bonds may be called in 5 years at ..

Reviews

Write a Review

Financial Management Questions & Answers

  Non value-maximizing motives for mergers

Please explain how agency problems may lead to non value-maximizing motives for mergers. Discuss the various academic theories offered as the rationale for motives induced by the agency problem.

  True of net working capital

Which of the following is true of net working capital?

  Cash flows used to analyze a proposed project

Which of the following should be considered when a company estimates the cash flows used to analyze a proposed project?

  Compute its current yield to maturity if the bonds price

Assume that you have just purchased a 3-year bond that is red empted at par with face value $1,000 and pays coupons semi-annually with annual rate 8%. If the bond is currently trading at a yield of 6%. Compute Its current price. Its current yield to ..

  Vermont civil union and the massachusetts marriage

Read carefully the case, Elia-Warnken v. Elia. In regards to the Vermont civil union and the Massachusetts marriage, what was the issue before the court and how did they rule on this? Do you agree or disagree with the court’s opinion. State reasons f..

  Net present value of undertaking the certification program

Natasha is 30 years old and currently employed as a Tier 2 field service representative for a telephony corporation and earns $38,000 a year that she anticipates will grow at 3% per year. What is the present value of the salary differential for compl..

  How much should you be willing to pay for bond

Bond X is noncallable and has 20 years to maturity, a 9% annual coupon, and a $1,000 par value. Your required return on Bond X is 11%; and if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5, years the yie..

  What is so ominous about the combination of events ben sees

What is so ominous about the combination of events Ben sees? What course of action, if any, should Ben take?

  Growth of bank holding companies and interstate banking

Several dominant movements in determining the structure of U.S. banking have been the spread of branch banking, the growth of bank holding companies and interstate banking which permits the geographic expansion of banking services and the ability of ..

  Inverse relationship between bond prices and interest rates

Jason Argo, 35, works for Inter-Mac Transportation Corp. His normal job of loading trucks paid $12.00 per hour. While working, he suffered a back injury and was declared 50 percent disabled. Discuss the inverse relationship between bond prices and in..

  Linear regression

The Electrocomp Corporation manufactures two electrical products: air conditioners and large fans. The assembly process for each is similar in that both require a certain amount of wiring and drilling. Each air conditioner takes 3 hours of wiring and..

  What is present value of the girls fortune

A 5 year girl was given a lottery ticket for her recent birthday. The ticket was the grand prize winner and is suppose to pay $80,000 per year after taxes, for 20 years. The state sued, however, and won the case arguing that it would pay the prize as..

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