A four-year corporate bond with a 7% coupon has a Z-spread of 200 bps. Assume a fl

Question:

A four-year corporate bond with a 7% coupon has a Z-spread of 200 bps. Assume a fl at yield curve with an interest rate for all maturities of 5% and annual compounding. Th e bond will most likely sell:

A . close to par.

B . at a premium to par.

C . at a discount to par.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 100% (QA)

Answered By

Jagadeesh Siddani

Being a chartered accountant, I tutor in Accounts, financial accounting, cost accounting, managerial accounting and auditing. In each and every subject, I have my own way of teaching, technique for remembering, guide students in planning and preparation for exams. This way of teaching gave me a great feedback from my students. I started teaching from 2014. By this experience, made me to identify were students need more attention, chart preparation for a chapter in single chart, easy way of solving problems, time management, planning for all subjects. I use to apply all the techniques which I learnt during my preparation and during teaching to my students. A small technique may save more time to understand a concept to the student. I use to motivate students when they need and when they are discouraged. Understanding the problem faced by students and explaining them with their standard of knowledge is also my strength. I hold an additional bachelor degree in commerce in computer applications. I accept accounting and financial assignments too. Providing a best solution for who are in need is my aim.

0.00 0 Reviews 10+ Question Solved

Related Book For book-img-for-question