The schedule of 1-year forward rate across next 5 years is as follows. Year 1-year Forward Rate 1 4.6% 2 4.9% 3 5.2% 4 5

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answerhappygod
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The schedule of 1-year forward rate across next 5 years is as follows. Year 1-year Forward Rate 1 4.6% 2 4.9% 3 5.2% 4 5

Post by answerhappygod »

The schedule of 1-year forward rate across next 5 years is
as follows.
Year
1-year Forward Rate
1
4.6%
2
4.9%
3
5.2%
4
5.5%
5
5.8%
What should the purchase price of a 4-year zero-coupon bond be if
it is purchased today and has face value of $1,000?
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