This paper circulates around the core theme of FIN 357 – Prices of zero-coupon bonds reveal the following pattern of forward rates together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 59. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Prices of zero-coupon bonds reveal the following pattern of forward rates:Year Forward Rate1 5%2 73 8In addition to the zero-coupon bond, investors also may purchase a 3-year bond making annual payments of $60 with par value $1,000.a. What is the price of the coupon bond?b. What is the yield to maturity of the coupon bond?c. Under the expectations hypothesis, what is the expected realized compound yield of the coupon bond? d. If you forecast that the yield curve in 1 year will be flat at 7%, what is your forecast for the expected rate of return on the coupon bond for the 1-year holding period?