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A Treasury bond has a face value of $ 1 2 , 0 0 0 , a coupon of 4 % , and several years
A Treasury bond has a face value of $ a coupon of and several years to maturity. Currently this bond sells for $ and the previous coupon has just been paid. What is the forward price for delivery of this bond in year?
bAssume that the interest rates for year out are flat at semiannually compounded. The T Bond pays coupons semiannually. If the forward is trading in the market for $ what will you do
If an atthemoney oneyear call option on the forward is available how much should it sell for?
If this is the only available option, can you use it to create a floor for the oneyear forward price?
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