Problem 1.4. Answer the following questions about fixed-income securities. 1. A Treasury bill with a par value of $100,0

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Problem 1 4 Answer The Following Questions About Fixed Income Securities 1 A Treasury Bill With A Par Value Of 100 0 1 (82.74 KiB) Viewed 106 times

Problem 1.4. Answer the following questions about fixed-income securities. 1. A Treasury bill with a par value of $100,000 due three months from today is selling for $96,545. What is its effective annual yield? 2. You buy a $1000 par value 30-year zero-coupon bond issued at a yield to maturity of 12%. After one year, the prevailing interest rate has fallen to 10%. How much money do you make if you sell the bond after this year? 3. A coupon bond pays interest twice per year, has a par value of $1200, will mature in 10 years, and has an annual coupon rate of 10%. It's current yield to maturity is quoted at 15%. What is the price of this bond?