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1.A U.S. investor bought a 6 year German federal bond (Bund), the face value of the bonds is 1,000 EUR, the coupon is 1.5%, and
1.A U.S. investor bought a 6 year German federal bond (Bund), the face value of the bonds is 1,000 EUR, the coupon is 1.5%, and the price 1,125 EUR. At the time of buying the bond, the exchange rate was 1.3824 [USD/EUR], now, three years later, find the exchange rate for the Euro and use it to calculate the YTM of the bond in Euros and in Dollars. Suppose the exchange rate will continue at the rate you found and remember you have three years residual life.
use EUR spot rate
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