STRIPS Consider an issuance of government bonds that have 20 years until maturity. The bond pays semiannual
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STRIPS Consider an issuance of government bonds that have 20 years until maturity. The bond pays semiannual coupons based upon a CR of 5.2 % and face value of $1,000. Suppose the bonds get “STRIPped” and you want to buy 10 of the coupon strips that mature 10 years from now and 10 of the coupon strips that mature 8 years from now. If the YTM on the 10-year STRIPS is 4.5 % and the YTM on the 8-year STRIPS is 4.1 %, how much would you have to pay in total for these securities?
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NARESH KUMAR
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ISBN: 9781493952991
1st Edition
Authors: Mark K. Pyles
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