Question
Question 1: 10 year, 10% annual coupon bond a)Assume the discount rate = 8%. (1)Should the bond be traded at premium or discount? (2)What is
Question 1: 10 year, 10% annual coupon bond
a)Assume the discount rate = 8%.
- (1)Should the bond be traded at premium or discount?
- (2)What is the IV?
b)Assume market price P = 1100.
- (1)Should the YTM be larger or smaller than 10%?
- (2)What is the YTM?
c)According to the return rates, should you buy or sell this bond?
d)According to the prices (values), should you buy or sell this bond?
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
