Question
Please I don't know how to solve for this question. (please if you can, make a detailed response to it) You are working as a
Please I don't know how to solve for this question. (please if you can, make a detailed response to it) You are working as a fixed income trader within an investment bank. A client asks you to show a price for a $1000 par, 5% coupon (nominal rate) US Treasury bond with 7 years remaining in its life. Coupons are paid semiannually and the next coupon payment is exactly six months away. You show her the following bid-ask (expressed in yield to maturity):
Bid: 6% Ask: 5.90%
3.b If you manage to buy and then sell this bond, in the same day, at your bid and ask prices shown above, what is the profit or loss (p&I) in dollars that you will make per bond?
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