You are a bond analyst working for a hedge fund. A bond you follow has face value 100, has a coupon rate of 5% (paid once a year) and matures in 5 years. You are trying to find if there is any profitable trading strategy. You've done extensive research and have formed your opinions on future economic conditions. As a result, you expect that there will soon be a major shift in the yield curve. The current and the expected yield curve is shown below: Year 1 2 3 4 5 Current 1% 1.50% 2.00% 3.00% 5.00% Expected 3.00% 2.50% 3.50% 4.00% 5.00% Question 1/3 0/1 point (graded) Calculate the price of the bond based on the current yield curve? (use 2 decimal digits) Question 2/3 0.0/1.0 point (graded) Calculate the price of the bond based on the expected yield curve $. Submit You have used 0 of 3 attempts Question 3/3 0.0/1.0 point (graded) Buy the bond You are 100% sure about your expectation of the movement of the yield curve in the near future. And you want to set up a trading position before the market price in the future shift of yield curve. What should you do? Sell the bond Do nothing Submit You have used 0 of 2 attempts < Previous (keep two decimal points) Next > Save Save