Using the rates above calculate the following forward rates: 1) The one year rat

Question

Using the rates above calculate the following forward rates: 1) The one year rate one year from Dec 8,2017 2) The one year rate two years from Dec 8,2017 3) The two year rate three years from Dec 8,2017 4) The two year rate five years from Dec 8,2017 2) Noble Energy coupon rate of 4.15% and maturity issue is 2.897%. Calculate its price. If the bond is callable after one year at $ 110.00; calculate it bonds are rated BAA3. A current issue of one it's bonds has a of 1 2/11 /2021. The Yield to Maturity of this s Yield to Call. 3) Apple Inc. (AAPL) earns $10 per share in free cash flow. It is expected to dividend of$3.00 per share next year. If it's cost of Capital,K= 1196 and it's long pay a term growth rate is 9.5%; Calculate it's current stock price using the constant growth dividend discount model. 4) Amazon (AMZN) is trading at $ 1,162.00. In 1 year it can either go up to $ 1510 or it can go down to $ 813.00. If the 1 year T-bill rate is 1.65%; find the price of a one year call option with a strike price of $1,450. Using Put-Call Parity, find the price of a one year put option with a strike price of $ 1,450. ot USD/GBP rate= 1.34 If the current 1 year risk free rate in the USA is 1.65% and the 1 year risk free rate in the UK is 0.45%; Calculate the 1 year th and the 1yearaisk GBP 1 year forward rate is 1.40 USD/GBP. Is there an arbitrags would you take advantage of this situation. Show all the eoretical forward USD/GBP rate. opportunity? How transactions.

Explanation / Answer

2)

Nobel Energy Bonds Face Value $100 Coupon Rate = 4.15% PMT $4.15 YTM = 2.8970% Years to Maturity = 4 Call Price FV $110 Years to Call = 1 years Current Price = PV(4,2.897%,-4.15,-100) $104.67 Yield To Call = Rate(1,4.15,-104.67,-110) 9.06%

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