Question
Bond A and bond B have the same maturity of 10 years and share identical risk features. Bond A has coupon rate of 7.5%, while
Bond A and bond B have the same maturity of 10 years and share identical risk features. Bond A has coupon rate of 7.5%, while bond Bs coupon rate is 6.5%. In each case the coupon is paid semi-annually. If bond B is currently selling for $800, what should be bond As current price?
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Public Finance And Public Policy
Authors: Arye L. Hillman
2nd Edition
0521738059, 978-0521738057
