Get your original paper written from scratch starting at just $10 per page with a plagiarism report and free revisions included!
a company has a obligation of 60 million kroner in 2 years. there are 2 bonds on the market today. 1. a 2-year annuity bond with a yield of 100 kroner annually and a price of 195.11 today 2. a 3-year 2% standing bond with a principal of 100 euro, the rate is set annually and a price of 99.12 euro today. first question a) show that the zero-coupon rate over the next three years is y (3) = 2.32% the bank has told us that the zero coupon rate over the next year is y (1) = 1.21% second question b) which y(2) means no arbitrage if a 1-year zero-coupon bond could be traded at y(1) = 1.21% (c) determine the present value of the obligation (d) determine the fischer-weil duration of the obligation and the two bonds traded