A bond portfolio named DEX, comprises four bonds (face value=$1000):
1)50 semi-annual bond, 5-year maturity, a coupon rate of 4%.
2)100 annual bonds, 30-year maturity, 8% coupon bond.
3)150 zero coupon bonds, 10-year maturity.
4)200 zero coupon bonds, 20-year maturity.
If yield to maturity (discount rate) is 6% for all bonds per year, what is the market value of DEX?
A bond portfolio named DEX, comprises four bonds (face value=$1000):
1)50 semi-annual bond, 5-year maturity, a coupon rate of 4%.
2)100 annual bonds, 30-year maturity, 8% coupon bond.
3)150 zero coupon bonds, 10-year maturity.
4)200 zero coupon bonds, 20-year maturity.
If yield to maturity (discount rate) is 6% for all bonds per year, what is the market value of DEX?
Related questions
Suppose theâ current, zero-coupon, yield curve forâ risk-free bonds is asâ follows:
| Maturityâ (years) | 1 | 2 | 3 | 4 | 5 |
| Yield to Maturity | 4.51 | 4.84 | 5.00â% | 5.12â% | 5.37â% |
a. What is the price per $100 face value of a 3â-year, zero-coupon risk-freeâ bond?
b. What is the price per $100 face value of a 5â-year, zero-coupon, risk-freeâ bond?
c. What is theâ risk-free interest rate for a 3â-year maturity?
Noteâ: Assume annual compounding.
