Question
1.You see two bonds. Both have two years to maturity. Both are 5% coupons. Bond A is priced at 102.37 and Bond B is priced
1.You see two bonds. Both have two years to maturity. Both are 5% coupons. Bond A is priced at 102.37 and Bond B is priced at 100.50 (full for both).
a)Why do you think this pricing gap exists and what does it mean for you?
b)What are you going to do to take advantage of this pricing difference assuming you find it acceptable?
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Basic Finance An Introduction to Financial Institutions Investments and Management
Authors: Herbert B. Mayo
10th edition
1111820635, 978-1111820633
