Question
Question 3 When the interest rate term structure is flat, the forward interest rate is a) Negative b) Equal to the difference between the ten-year
Question 3
When the interest rate term structure is flat, the forward interest rate is
a) Negative
b) Equal to the difference between the ten-year zero rate and the two-year zero rate
c) Equal to the five-year zero rate
d) Equal to the inflation rate
e) Decreasing 1
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Question 4
Compute the dirty bond price. Consider a bond with ten years to maturity that pays a semi-annual coupon of $100 per year. The quoted price of this bond on the Bloomberg terminal is currently $1000. The last time that this bond issued a coupon payment was 108 days ago. Assume that there are 360 days per year. What is the current dirty bond price?
a) $1020
b) $1030
c) $1050
d) $1060
e) $1080
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