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national university Operations And Supply Chain Management Assignment Help - the standard deviation


Question - You own a $1,000-par zero-coupon bond that has 5 years of remaining maturity. You
plan on selling the bond in one year, and believe that the required yield next year will
have the following probability distribution:
Probability
Required
Yield
0.1 6.60%
0.2 6.75%
0.4 7.00%
0.2 7.20%
0.1 7.45%
(a) What is your expected price when you sell the bond?
(b) What is the standard deviation?

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