Question
A bond has two years to maturity. Assume that time is measured in years and that coupons are paid annually. The annual coupon rate is
A bond has two years to maturity. Assume that time is measured in years and that coupons are paid annually. The annual coupon rate is 7% per annum and the face value is 1,000. The price of the bond is 975. The two-year spot rate is 1.25 times the one-year spot rate. What is the YTM of a bond which has the same level of risk but pays a coupon of 7.6% per annum?
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The New Managed Account Solutions Handbook
Authors: Stephen D. Gresham, Arlen S. Oransky
1st Edition
0470222786, 978-0470222782
