The current quoted price of a 13% coupon bond is $110. It pays coupon semi-annually. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The current quoted price of a 13% coupon bond is $110. It pays coupon semi-annually. The next coupon will be paid in 6-days (total number of days in this semi-annual period is 181) and the futures contract will last for 62-days. The term structure rate of interest is flat at 12% and the conversion factor for the bond is 1.5. Assume there is 184-days in half year for the futures. Compute the quoted futures price of the contract. (A) $110.01 (B) $73.34 (C) $112.03 (D) $109.83 The current quoted price of a 13% coupon bond is $110. It pays coupon semi-annually. The next coupon will be paid in 6-days (total number of days in this semi-annual period is 181) and the futures contract will last for 62-days. The term structure rate of interest is flat at 12% and the conversion factor for the bond is 1.5. Assume there is 184-days in half year for the futures. Compute the quoted futures price of the contract. (A) $110.01 (B) $73.34 (C) $112.03 (D) $109.83
Expert Answer:
Answer rating: 100% (QA)
Current quoted price110 Coupon rate13 interest is paid semi annually Coupon100 10... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The July 15, 2015, quoted price of a bond with a coupon rate of 4.5%, payable semiannually, maturing on March 1, 2019, is $990. If you buy the bond on July 15, 2019, what is the total price you must...
-
A 20-year Fitzgerald bond pays 9 percent interest annually on a $1,000 par value. If the bond sells at $945, what is the bonds yield to maturity? What would be the yield to maturity if the bond paid...
-
There is no futures contract on aviation fuel. Combo Air Inc. has to buy 3 million gallons of aviation fuel in three months. Suppose you are in charge of Combo Airs hedging activities. You gather the...
-
How do complementary assets and social complexity influence a firm's organization?
-
Describe in your own words, the percentage of total water on earth that is freshwater and identify the compartments where its located?
-
What are the different grades of gage blocks, and why do they come in sets? QUESTION CONTINUE TO NEXT PAGE Roughness height rating micrometres, Ann (microinches, nl AA 50 25 125 6.3 3.2 1.6 0.80 0.40...
-
AutoAnswer, Inc., a manufacturer of telephone answering machines, uses a factory overhead applied rate to charge overhead costs to its manufactured products. The company manager estimates that...
-
Somerset Inc. has finished a new video game, Snowboard Challenge. Management is now considering its marketing strategies. The following information is available: Anticipated sales price per unit...
-
Which element of the promotional mix is based on impersonal, paid, one - way communication about an organization or product? Question 5 options: a ) Public relations b ) Personal selling c )...
-
The Xiomaras have an adjusted gross income of $137,865. They are looking at a new house that would have a monthly mortgage payment of $1,687. Their annual property taxes would be $7,550 and their...
-
Assess how the 1 3 8 Student Living Jamaica ltd has changed from 2 0 2 1 - 2 0 2 2 . What conclusions can you draw from this information about 1 3 8 Student Living Inc. strategy? 5 . What conclusions...
-
Choose a mortgage for yourself. You may choose a house for sale online as a hypothetical purchase. Using the selling price of the home, the property taxes, homeowner's insurance, HOA fees (if...
-
Simplify. 2 9 5w x V 20wx Assume that all variables represent positive real numbers.
-
Can you visit the website of either a mutual fund dealer or an investment dealer and then provide a one-page summary that encompasses details, analysis, and a conclusion pertaining to the financial...
-
Add as indicated. 7x+11 5x+3 + 6x + 7 6x+7
-
Simplify the radical. Assume that all variables represent positive real numbers. 54z15 3z4
-
Pierre receives a thirty-year annuity paying $400(1.03) * + $100(1.02) 2t + $70t - $40 at the beginning of the t-th year. Find the value of this annuity at the end of the tenth year if the annual...
-
Construct a 4 x 25 design confounded in two blocks of 16 observations each. Outline the analysis of variance for this design.
-
A stock price is currently $50 and the risk-free interest rate is 5%. Use the DerivaGem software to translate the following table of European call options on the stock into a table of implied...
-
Explain how you would do the analysis to produce a chart.
-
Under what circumstances is it possible to make a European option on a stock index both gamma neutral and vega neutral by adding a position in one other European option?
-
Define cash equivalents and give three examples.
-
B-You is a consulting firm that works with managers to improve their interpersonal skills. Recently, a representative of a high-tech research firm approached B-Yous owner with an offer to contract...
-
Two supplementary schedules frequently accompany a statement of cash flows prepared by the direct method. Briefly explain the content of these schedules.
Study smarter with the SolutionInn App