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A 3 year dual currency AAA rated bond (Euro-USD) pays a 7.5% annual coupon in Euros (on a par value of a 1000 Euros). The
A 3 year dual currency AAA rated bond (Euro-USD) pays a 7.5% annual coupon in Euros (on a par value of a 1000 Euros). The principal repaid will be US $ 1250. The zero coupon yield curves for 1.2 ans year maturity AAA rated Euro denominated bonds and AAA rated US$ denominated bonds are given below. The current spot rate is $ 1.31/Euro. 2 year 3 year 1 year 3.5 % 2.5 % Euro denominated US $ denominated 4.0 % 4.5 % 3.5 % 3.0% 6 How much would you be willing to pay today in USD for only the bond's coupon payments? USD 207.53 USD 167.60 USD 264.12 USD 271.86
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