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Hi I have a question related to fixed income Using the discount factors from question 2.3, price a 1.5-year bond with a coupon of .5%.
Hi I have a question related to fixed income
Using the discount factors from question 2.3, price a 1.5-year bond with a coupon of .5%. If over the subsequent 6 months the term structure remains unchanged, will the price of the .5% bond increase, decrease, or stay the same? Try to answer the question before calculating and then calculate to verify.
What does "over the subsequent 6 months the term structure remains unchanged" mean? does it mean we only calculate 1.0 year bond, after six months have passed?
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