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there is an inverse floater with a current annual coupon of $35 and a face of $500. Its companion floater is selling at par, $500,
there is an inverse floater with a current annual coupon of $35 and a face of $500. Its companion floater is selling at par, $500, and has a current annual coupon $5. Both these instruments mature in 5 years. What is the current price of the bond that was used to generate these instruments and what is the price of the inverse floater? What is the effective coupon ceiling ( highest the coupon rate could be and still get Pfloater = $500) on the floater?
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