An insurance company purchases corporate bonds in the secondary market with six years to maturity. Total par value is $55000000. The coupon rate is 11%, with annual interest payments. If the required rate of return is 6.0 percent, what will the market value of the bonds be then? State the answer as a number with 2 decimals without $ sign.

A bond has a face value of $1000, fixed coupon rate of 8.1% and 3 years to maturity. The discount rate is 3.1%. If Macaulay duration equals to 2.8, what is modified duration in this case? State the answer as a number with 2 decimals (for example, 3.12).

What is the yield to maturity on a simple loan for $1 million that requires a repayment of $2 million in 11 years’ time? State the answer as a number with 2 decimals without % sign. For example, 5.55 is a correct answer, while 5.55% or 0.055 are not correct.

If an investor wants to receive 500000 euros and the expected yield on the 14-year bond is 8.4% then what would be the amount of an initial investment? State the answer as a number with 2 decimals without any currency sign.

If investors require a 1.4 percent return on a 30-year discount bond with a $10000 face (par) value, what is the price that they are willing to pay? State the answer as a number with 2 decimals without $ sign.

What is the Macaulay duration of the bond with zero coupon rate and current market price of 17 EUR? Discount rate is 2%. Time to maturity is 23 years.

Calculate the Macaulay duration of a bond which has 3 years time to maturity and 5% coupon yield. Discount rate is 3 % and the face value of the bond is 100 EUR.

The right answer is ...

Let us assume the following deposit rates 

Please calculate the expected forward interest rate for deposit starting at the end of first year and lasting one year (one year forward rate). 

Let us assume that the one year risk-free interest rate is 2.1%. Now imagine that the yield of corporate bond maturing one year from today is 12.9%. The current market price of corporate bond is 164.71 EUR.

Please calculate the probability of default of the corporate bond i.e. the likelyhood that the corporation will default in one year.

  Present your answer in percent without inserting percentage sign (%).