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The yield for a 5 year bond today is ____ rate and the yield for a 2 year bond beginning next year is ___ rate.
The yield for a 5 year bond today is ____ rate and the yield for a 2 year bond beginning next year is ___ rate.
- A. Spot; forward
- B. forward; spot
- C. Spot; spot
- D. forward; forward
2. Assume the quoted price for Eurodollar futures is 98.5 today. This implies that if you invest ________ dollars today then you will get _____ after 90 days.
- A. 985,000; 1M
- B. 985,000 ; 996,250
- C. 996,250 ; 1M
- D. 1M ; 1,009,850
Which of the following bonds will rise the most if yield drops the same for all bonds?
- A. 5 year zero coupon
- B. 4 year zero coupon
- C. 5 year 2% coupon
- D. 4 year 8% coupon
- E. 5 year 8% coupon
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