Fight Finance

Courses  Tags  Random  All  Recent  Scores

Scores
keithphw$5,571.61
an4_bolt$4,066.43
Visitor$800.00
Visitor$630.00
Visitor$490.00
tomtomtom$453.98
Visitor$410.00
Visitor$360.00
Visitor$340.00
Visitor$281.54
Jayt$280.00
Visitor$260.00
Visitor$250.00
Visitor$230.00
Visitor$230.00
Visitor$230.00
Visitor$220.00
Visitor$210.00
Visitor$210.00
Visitor$190.00
 

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