Question
answers in percentage please!!!! 19-4 Suppose you purchase a 10-year AAA-rated Swiss bond for par that is paying an annual coupon of 7 percent and
answers in percentage please!!!!
19-4
Suppose you purchase a 10-year AAA-rated Swiss bond for par that is paying an annual coupon of 7 percent and has a face value of 2,000 Swiss francs (SF). The spot rate is U.S. $0.66667 for SF1. At the end of the year, the bond is downgraded to AA and the yield increases to 9 percent. In addition, the SF depreciates to U.S. $0.74074 for SF1. |
a. | What is the loss or gain to a Swiss investor who holds this bond for a year? (Input the amount as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) |
(Click to select)Loss to Swiss investor | % |
b. | What is the loss or gain to a U.S. investor who holds this bond for a year? (Input the amount as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) |
(Click to select)Gain to U.S. investor | % |
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