The writer is very fast, professional and responded to the review request fast also. Thank you.
Estimate term structure of discount factors, spot rates and forward rates by using data on five semi-annual coupon paying bonds with $100 face value each: The bonds, respectively, have 1.25, 5.35, 10.4, 15.15 and 20.2 years to maturity; pay coupon at annual rates of 3.88, 4.88, 5.88, 6.88, and 7.88 percent of face value; and are trading at quoted spot market prices in dollars of 97.88, 98.88, 99.88, 100.88 and 101.88. Specify the discount factor function d(t) by a third degree polynomial with unknown parameters a, b, and c, as done in class. Using estimated d(t) function, determine spot rate and forward rate functions by assuming half-year compounding. Then write the values of the following based on your estimation.
5. Coefficient of parameter a in first bond price equation.
6. Coefficient of parameter b in first bond price equation.
7. Coefficient of parameter c in first bond price equation.
8. Coefficient of parameter a in second bond price equation.
9. Coefficient of parameter b in second bond price equation.
10.Coefficient of parameter c in second bond price equation.
11.Coefficient of parameter a in third bond price equation.
12.Coefficient of parameter b in third bond price equation.
13.Coefficient of parameter c in third bond price equation.
14.Coefficient of parameter a in fourth bond price equation.
15.Coefficient of parameter b in fourth bond price equation.
16.Coefficient of parameter c in fourth bond price equation.
17.Coefficient of parameter a in fifth bond price equation.
18.Coefficient of parameter b in fifth bond price equation.
19.Coefficient of parameter c in fifth bond price equation.
20.Parameter a.
21.Parameter b.
22.Parameter c.
23.Current price of a dollar at 5th year.
24.Current price of a dollar at 7th year.
25.Current price of a dollar at 10th year.
26.Current price of a dollar at 15th year.
27.Spot rate for term 2 year.
28.Spot rate for term 5 year.
29.Spot rate for term 10 year.
30.Spot rate for term 17 year.
31.Forward rate for half year period 2.5 to 3.0 years.
32.Forward rate for half year period 5.5 to 6.0 years.
33.Forward rate for half year period 10.5 to 11.0 years.
34.Forward rate for half year period 15.5 to 16.0 years.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more