Question
A forward contract to be matured in one year on a coupon-bearing bond is currently $950. A $50 coupon payment is expected after six and
A forward contract to be matured in one year on a coupon-bearing bond is currently $950. A $50 coupon payment is expected after six and nine months. The continuous compounding risk-free interest rate is 6% per annum for all maturities. What is the equilibrium price of this one-year forward contract?
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
