As your next task , the portfolio manager asks you to determine the forward price of a
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Question:
As your next task, the portfolio manager asks you to determine the forward price of a 90-day forward contract on a bond that is currently trading for $940 and is expected to make coupon payments of $50 in 50 days.
After 60 days, the bond is now trading at $950. What is the value of the forward contract on the bond to the money manager (long) assuming the risk free rate is 2%?
Related Book For
Managerial Accounting
ISBN: 978-1118385388
2nd edition
Authors: Ramji Balakrishnan, Konduru Sivaramakrishnan, Geoff B. Sprinkle
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