You are quoted at the following market prices
Do you have a query about the market price quoted for zero coupon bonds? want to determine the fair froward price of the same? Find responses from experts on this page.
V (2) = 0.80 and V(4) = 0.60.
(a)explain what is meant by a zero-coupon bond per unit T-year.
(b) subject to the absence of arbitration, settlement on-site rats2, and Fair Forward Rate f24. ]
You want to sign a forward contract for the purchase of 20 tons of steel in 4 years.
The current price of steel is a ton.
(c) briefly explain what is meant by a forward contract for the purchase of steel.
(d) assuming no arbitration, determine the fair forward price of the contract