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Evaluate the following substitution swap: You currently hold a 25-year, 9.0 percent coupon bond priced to yield 10.5 percent. As a swap candidate, you are

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Evaluate the following substitution swap: You currently hold a 25-year, 9.0 percent coupon bond priced to yield 10.5 percent. As a swap candidate, you are considering a 25-year, AA-rated, 9.0 percent coupon bond priced to yield 10.75 percent. (Assume a one-year work-out period and reinvestment at 10.5 percent.) Please calculate the Realized Compound Yield for the current bond , candidate bond , and Value of swap (Keep 3 decimals for RCYs and report value of swap in basis points) Evaluate the following substitution swap: You currently hold a 25-year, 9.0 percent coupon bond priced to yield 10.5 percent. As a swap candidate, you are considering a 25-year, AA-rated, 9.0 percent coupon bond priced to yield 10.75 percent. (Assume a one-year work-out period and reinvestment at 10.5 percent.) Please calculate the Realized Compound Yield for the current bond , candidate bond , and Value of swap (Keep 3 decimals for RCYs and report value of swap in basis points)

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