Fight Finance

Courses  Tags  Random  All  Recent  Scores

Scores
keithphw$6,001.61
an4_bolt$4,106.43
Visitor$442.43
Visitor$380.00
Visitor$280.00
Visitor$260.00
Visitor$240.00
SGDMGSM$183.46
Visitor$157.00
Visitor$129.43
Visitor$129.43
Visitor$106.43
Visitor$100.00
Visitor$88.61
Soo$75.33
Visitor$62.09
Visitor$60.00
Visitor$60.00
Visitor$46.09
Visitor$43.81
 

Question 108  bond pricing, zero coupon bond, term structure of interest rates, forward interest rate

An Australian company just issued two bonds:

  • A 1 year zero coupon bond at a yield of 10% pa, and
  • A 2 year zero coupon bond at a yield of 8% pa.

What is the forward rate on the company's debt from years 1 to 2? Give your answer as an APR compounding every 6 months, which is how the above bond yields are quoted.




Copyright © 2014 Keith Woodward