Question
You enter into a forward contract to buy a 10 year, zero coupon bond that will be issued in one year. The face value of
You enter into a forward contract to buy a 10 year, zero coupon bond that will be issued in one year. The face value of the bond is $1,000, and the 1-year and 11-year rates are 5 and 6 percent, respectively. What is the forward price of your contract?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
13th edition
978-1285027371, 128502737X, 978-1133541141
