Questions Question 3 (4 points) A semiannual bond with a $1,000 face value has a

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Questions Question 3 (4 points) A semiannual bond with a $1,000 face value has a 9 percent coupon rate of and an 11 percent yield to maturity. If the bond is selling for $892.38, how many years are left to maturity? Page 1 1) 7.89 years 2) 8.02 years 3) 8.14 years 4) 8.37 years a B 10 11 12 Queation44 aoints The observed relationship between short-term and long-term Interest rates is known as the t is depicted graphicaily as the 13 1415 1) term structure of interest rates: yield curve 2) long-term structure interest curve 3) yield to maturity, interest rate yield 4) fisher effect: yield curve 16 17 18 19 20 21 22 23 24 Question 5 (4 points) 25 A three months Treasury bill with S 10.000 face value has a discount rate of 1.88% matures in 90 days Compute its price? 1)$9.953 2) $9.959 )$9.964 4 $9.976 Legend Saved Response Unsaved Respone Question 2 Saved

Explanation / Answer

Q3) 8.370 =NPER(11%/2,9%*1000/2,-892.38,1000,)/2 Q4) Term structure of interest rates, Yield Curve Q5) $9,953 =-PV(1.88%/4,1,,10000,) Q6) $613.66 =-PV(5.5%/2,18,,1000,) Q7) $1,096.52 =-PV(7.75%/2,24,9%*1000/2,1000,0) Q8) Coupon payment 45 =9%*1000/2 Q9) Present value of all the future cash flows related to that bond Q10) Callable bond Q11) Yield to maturity

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