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[Economics] Zero bond obligation

  1. Oct 19, 2014 #1
    This assignment is translated from another language, so some words be not be completely correct

    The problem statement, all variables and given/known data

    (Annual market rate might be yield to maturity?)
    Face value = 1000


    Obligation----Condition----Payment profile----Maturity------Annual Coupon Rate-----Annual market rate
    ------1--------------A-----------Serial loan--------5 years---------------0%---------------------------6%
    ------1--------------B-----------Serial loan--------5 years---------------0%---------------------------14%


    ------2--------------A-----------Serial loan--------5 years---------------10%--------------------------6%
    ------2--------------B-----------Serial loan--------5 years---------------10%--------------------------14%


    ------3--------------A-----------Serial loan-------10 years---------------10%--------------------------6%
    ------3--------------B-----------Serial loan-------10 years---------------10%--------------------------14%


    I have to calculate the rate/exchange rate for all the obligations, and I think I've got it right for obligation 2 and 3.

    I got obligations to:
    2A: 1105,02
    2B: 910,46
    3A: 1175,99
    3B: 863,31

    Do I do the same for obligation 1? It says the coupon rate is zero, might it be a zero-coupon bond then?? It also says serial loan, and I thought zero-coupon bonds were standing/bullet loans only.

    Since it says serial loan, do I calculate obligation 1 like i did with 2 and 3, or do i treat it as a zero coupon bond?
     
  2. jcsd
  3. Oct 24, 2014 #2
    Thanks for the post! Sorry you aren't generating responses at the moment. Do you have any further information, come to any new conclusions or is it possible to reword the post?
     
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