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A: We need to calculate the price of debenture i.e. present value in this question.
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- The par value of 10% debenture is $1,000 with maturity is 3 years. What would be the price by general floating formula if interest rate is 12%, Use excel.The annual payment of a 10-year fixed-income security is $50. The payments are made at the end of each year. The market-required rate of return is 10%. What is the current price of the securities?A ten-year floating-rate note (FRN) has coupons referenced to 3-month pound LIBOR, and pays coupon interest quarterly. Assume that the current 3-month LIBOR is 4 percent. If the risk premium above LIBOR that the issuer must pay is 12.5 basis points, the next period's coupon payment on a £1,000 face value FRN will be Group of answer choices £31.25. £82.50. £165.00. £10.31.
- If the interest rate is 15%, what is the present value ofa security that pays you $1,100 next year, $1,250 theyear after, and $1,347 the year after that?You enter in a long position in a 6x12 FRA at a LIBOR rate of 3.00% and a nominal value of $10M. (a) When does this FRA expire in months? (b) Suppose, at maturity, the 6-month LIBOR rate is 3.5%. What is your payoff on that FRA? Note you should calculate this value at the maturity of the FRA, which is month 6.1. Suppose the term structure of interest rates is shown below: 1 year Term Rate (EAR%) 5.00% 2 years 4.80% 3 years 4.60% 5 years 4.50% 10 years 4.25% 20 years 4.15% What is the present value (PV) of receiving $1100 per year with certainty at the end of the next three years?
- The term structure of interest rates is as follows: Maturity Spot Rate / 14% 212%/. What is the forward rate for one year, one year from now (f 1.1)? 2. If the forward rate for two years, one year from now (12. 1) is equal to 9%, then what is. the spot rate with maturity 3 years (13)?OIS rates are 3.4% for all maturities. What is the value of an OIS swap with two years to maturity where 3% is received and the floating reference rate is paid. Assume annual compounding, annual payments, and $100 million principal.A 2-year Treasury security currently earns 1.97 percent. Over the next two years, the real risk-free rate is expected to be 1.00 percent per year and the Inflation premium is expected to be 0.60 percent per year. Calculate the maturity risk premium on the 2-year Treasury security. (Round your answer to 2 decimal places.) 1% Maturity risk premium
- The promissory note with a face value of 500,000 has 45 days until maturity. If the relevant yield is 7% then what is the current price of this promissory note?A STRIPS with nine years until maturity and a face value of $10,000 is trading for $7,693. What is the yield to maturity?Suppose the 1-year and 2-year OIS rates are 2% and 4%, respectively. Consider an OISswap with two years to maturity where you receive 3% and pay the floating reference ratewith principal 1 million. If the payments are made annually with annual compounding, what is the value of the swap