Question
Consider a Treasury bond with maturity 30 years paying semiannually a coupon rate of 5% per year on a principal of $1,000. a. If the
Consider a Treasury bond with maturity 30 years paying semiannually a coupon rate of 5% per year on a principal of $1,000.
a. If the current YTM of the bond is 6%, compute the price of the security.
b. Suppose that 6 months have passed, and the YTM of the bond is now 5.8%. Compute the new price of the security.
c. If you buy the security at the price computed in a), hold it for 6 months and sell it at the price computed in b), what is your HPR expressed as an annual rate with annual compounding?
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The Critical Handbook Of Money Laundering Policy Analysis And Myths
Authors: Petrus C. Van Duyne, Jackie H. Harvey, Liliya Y. Gelemerova
1st Edition
1137523972, 978-1137523976
