--%>
Assignment Help - homework help

All rates are stated annually with semiannual compounding

1 Assume the following (all rates are stated annually with semiannual compounding)

a. Six Month Spot Rate is 2%

b. Six Month Forward rate starting at month six is 2.2%

c. Six Month Forward rate starting at month 12 is 2.4%

d. Six Month Forward rate starting at month 18 is 2.5%

Then find the price of a two year treasury note with a coupon rate of 4% 

2 Assume that you purchase a bond with a 5% annual coupon (paid semiannually) and exactly ten years to maturity.The yield is 4.5% (stated annually with semiannual compounding).After six months, the yield of the bond is 4.3%. What is the Total Return for the holding period?


3 Suppose that your trading desk bought $96,000,000 face value of the one-year 5.00% coupon bond.  Assume that the bond is priced at Par.  You want to hedge the interest rate risk with T-Bill futures until you can cover the position by buying in the market place. One T-Bill Futures Contract will pay the long position $25 for every one basis point drop in T-Bill rates. Ignore any possible transactions in the Repo Market.


a. Do you buy or sell contracts?

b. How many contracts would you buy or sell?

   Related Questions in Corporate Finance

  • Q : Is the given affirmation of an

    Is the given affirmation of an accountancy expert true? “There valuation criterion that reflects the value of the shares of a company in the most accurate way is based on the amount of the equity of shareholder of its balance sheet. Stating that the value of sha

    		•
  • Q : Explain breakthroughs on

    Explain breakthroughs on low-discrepancy sequences.

    		•
  • Q : Explain the Monte Carlo evaluation of

    Explain the Monte Carlo evaluation of integrals.

    		•
  • Q : Is this possible to make money in the

    Is this possible to make money in the stock market while the quotations are going down? And what is credit sale?

    		•
  • Q : NPV and Other Investment Criteria The

    The XYZ Manufacturing Company is considering the below investment proposal. The initial investment is $100,000. It was an expected economic life of 10 years. The net cash flow in the initial year is expected to be $25,000 and annual net cash flow is expected to develo

    		•
  • Q : What is Financial Analysis Financial

    Financial Analysis: It is the investigation and interpretation of financial statements and associated financial reports. Trained and certified accountants generally complete this kind of analysis. The role of a financial analyst is to

    		•
  • Q : Relationship between the preferred

    Quetion: A private equity fund invests $100 million into a portfolio company and receives 100% of the preferred stock and 80% of the common stock of the company.  The preferred stock carries a face value of $1

    		•
  • Q : Illustrates financial consultant has

    A financial consultant obtains various valuations of my company when this discounts the Free Cash Flow (FCF) as opposed to when this uses the Equity Cash Flow. Is it correct?

    		•
  • Q : Data Case Please assist with the

    Please assist with the attached Data Case assignment

    		•
  • Q : Could we explain that the shares’ value

    Could we explain that the shares’ value is intangible?

    		•