Question
The Treasury plans to issue a 2-year maturity, 9% coupon bond that'll pay coupons once per year. The face value of the bond is 100.
The Treasury plans to issue a 2-year maturity, 9% coupon bond that'll pay coupons once per year. The face value of the bond is 100. The yield-to-maturity on 1-year zero-coupon bonds is currently 7%. The yield-to-maturity on 2-year zeros is 8%.
Assuming that the expectations theory of the yield curve is correct; what is the market expectations of the price that the bond will sell for next year?
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Technical Analysis The Complete Resource For Financial Market Technicians
Authors: Charles Kirkpatrick, Julie Dahlquist
3rd Edition
0134137043, 978-0134137049
