Question
A brokerage firm purchases a 1000 face value coupon bond paying 6% per year on a semi-annual frequency. From that bond, the firm creates two
A brokerage firm purchases a 1000 face value coupon bond paying 6% per year on a semi-annual frequency. From that bond, the firm creates two bonds: A floater and an inverse floater. The face value of the floater is 700 and it pays LIBOR. What is the annual coupon rate of the inverse floater?
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International Financial Management
Authors: Cheol Eun, Bruce Resnick
5thEdition
0073382345, 9780073382340
