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q14 Olivia purchases a 10-year AAA-rated British bond for par that is paying an annual coupon of 9% and has a face value of 1,000
q14
Olivia purchases a 10-year AAA-rated British bond for par that is paying an annual coupon of 9% and has a face value of 1,000 British Pounds (). The spot rate is US$1.105 for S. At the end of the year, the bond is downgraded to AA and the yield increases to 11%. In addition, the new spot rate becomes US$0.985 for . what is the gain (loss) if Olivia holds this bond for a yearStep by Step Solution
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