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4. The yield curve is upward sloping. Here are characteristics of a bond you bought today: N=0, I/Y=1.5%, PV = $-1,000, PMT= $30, FV
4. The yield curve is upward sloping. Here are characteristics of a bond you bought today: N=0, I/Y=1.5%, PV = $-1,000, PMT= $30, FV = $1,000 The current 4yr I/Y is 1.25% Assume the yield curve is exactly the same in 1yr and you liquidate at that time for the fundamental value of the bond What is your total return percentage *Assume interim cashflow is reinvested at 1.5% I/Y
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Options Futures and Other Derivatives
Authors: John C. Hull
10th edition
013447208X, 978-0134472089
