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A review of mortgage-backed bonds would not be complete without an understanding of bond pricing. So, assume Fannie Mae is issuing a 20 year bond
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A review of mortgage-backed bonds would not be complete without an understanding of bond pricing. So, assume Fannie Mae is issuing a 20 year bond at 5% with semi-annual payments (interest only). If the marketplace deems that a 5.25% return is required, what is the approximate price of the bond (per $1,000 and "as quoted")?
$969.27; quoted: 96.9
$984.41; quoted 98.4
$1000; quoted 100.0
$1026.92 quoted 102.7
A review of mortgage-backed bonds would not be complete without an understanding of bond pricing. So, assume Fannie Mae is issuing a 20 year bond at 5% with semi-annual payments (interest only). If the marketplace deems that a 5.25% return is required, what is the approximate price of the bond (per $1,000 and "as quoted")?
| $969.27; quoted: 96.9 | ||
| $984.41; quoted 98.4 | ||
| $1000; quoted 100.0 | ||
| $1026.92 quoted 102.7 |
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