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You are a bond trader, and there has been a power failure in New York City. You and other traders have taken to a
You are a bond trader, and there has been a power failure in New York City. You and other traders have taken to a street corner in order to keep trading. You can buy or sell the following bonds with the following cash flows (or CF) at the following prices. All bonds mature at or before the end of year 3. Bond A B C (Answers) Bond Price Today A 100.00 (B) Bd 95.00 C 112.00 Total Price 100.00 95.00 112.00 Buy Sell (shares) (shares) 3 Coupon GOL 5% 2% 9% Cash flow NOW - 100 -95 F112 Face Valueze Inderol Stow All Work $100 $100 $100 The Cash flow Year 1 5 2 9 Cash flow Year 2 5 2 9 Cash flow Year 3 105 102 109
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