Question
Consider two bonds with known pricing; Bond A (price: PA) & Bond B (Price: PB). Find (x,y) such that price of bond C (Pc) is
Consider two bonds with known pricing; Bond A (price: PA) & Bond B (Price: PB).
Find (x,y) such that price of bond C (Pc) is such that the cashflows given in the following table would solve:
Pc = x.PA + y.PB
Time 0 1 2 Prices
CF:A 0 50 150 PA
CF:B 0 100 100 PB
CF:C 0 0 25 Pc=?
Consider two bonds with known pricing; Bond A (price: PA) & Bond B (Price: PB). Find (x,y) such that price of bond C (Pc) is such that the cashflows given in the following table would solve: Pc = x.PA + y.PB Time 0 1 2 Prices CF:A 0 50 150 PA CF:B 0 100 100 PB CF:C 0 0 25 Pc=Step by Step Solution
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The New Market Wizards Conversations With Americas Top Traders
Authors: Jack D. Schwager
1st Edition
0887306675, 978-0887306679
