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Find the value of a three-year dual currency bond with a par value of exist1, 000. Annual coupons will be paid in U.S. dollars at
Find the value of a three-year dual currency bond with a par value of exist1, 000. Annual coupons will be paid in U.S. dollars at 5% coupon rate and a pound500 final payment will be made at the maturity. The cash flows of the bond are: The dollar-based yield to maturity is i_exist = 3%:the spot exchange rate is exist1.80 = pound 1.00:expected inflation over the next three years is pi_exist = 2% in the U.S. and pi_pound = 3% in the U.K. A. exist941.30. B. exist965.06. C. exist987.06. D. exist927.62
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