Bond price H/W problems

[Brijesh Mishra]

Dear David ,

I am very new student. Can you please assist me to solve couple of questions. It would be great kind if any one give me solution ASAP.


An investor is considering the purchase of 10 year G Secs and plans to hold them to maturity; there are two bonds that meet the investor’s requirements. Bond 1 is a 10 year 105 bond with a price of P1= 92.21. Bond 2 is a 10 year 7% bond with a price of P2= 75.84. Based on the price information contained in the two bonds the investor would like to compute the theoretical price of a hypothetical 10 year zero coupon bond. Find this theoretical price.

2.
Consider two 5 year bonds of FV Rs 100 each; one has a 9% coupon and sells for Rs 101; the other has a 7% coupon and sells for Rs 93.20. Find the price of a 5- year zero coupon bond.

For second question I am able to Calculate YTM for both bond i.e. 4.58 and 2.9 but not able to proceed .


Again can any one give me solution as soon as possible .


Thanks
Brijesh Mishra

 

[David Harper CFA FRM]

Brijesh Mishra - I moved your post (you appended to an unrelated thread, which distracts from future comprehension of the Q&A, candidly) to a new thread. Thanks,

 

[David Harper CFA FRM]

Brijesh Mishra - please don't post the same question in multiple locations, it just creates repetitive-noise in our forum which we like to keep as clean as possible. Thanks,

 

[elitezero]

bootstrapping

Dear David ,

I am very new student. Can you please assist me to solve couple of questions. It would be great kind if any one give me solution ASAP.


An investor is considering the purchase of 10 year G Secs and plans to hold them to maturity; there are two bonds that meet the investor’s requirements. Bond 1 is a 10 year 105 bond with a price of P1= 92.21. Bond 2 is a 10 year 7% bond with a price of P2= 75.84. Based on the price information contained in the two bonds the investor would like to compute the theoretical price of a hypothetical 10 year zero coupon bond. Find this theoretical price.

2.
Consider two 5 year bonds of FV Rs 100 each; one has a 9% coupon and sells for Rs 101; the other has a 7% coupon and sells for Rs 93.20. Find the price of a 5- year zero coupon bond.

For second question I am able to Calculate YTM for both bond i.e. 4.58 and 2.9 but not able to proceed .


Again can any one give me solution as soon as possible .


Thanks
Brijesh Mishra