Question
Suppose that you can borrow at a rate of 5% per annum and invest at a rate of 4% per annum. Consider a coupon that
Suppose that you can borrow at a rate of 5% per annum and invest at a rate of 4% per annum. Consider a coupon that pays $200 in 2 years. Using a no arbitrage argument, show that there is a range of possible prices for the coupon.
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Handbook On Second Lien Loans & Intercreditor Agreements
Authors: Mark N. Berman, Jo Ann J. Brighton
1st Edition
0981865593, 978-0981865591
