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You have entered into a forward contract with the following parameters: Bond: 5 year, zero coupon bond Issuance: Will be issued in 1 year Face
You have entered into a forward contract with the following parameters:
| Bond: | 5 year, zero coupon bond |
| Issuance: | Will be issued in 1 year |
| Face Value: | $1000 |
| 1 year spot rate: | 3 pct. |
| 10 year spot rate: | 6 pct. |
Group of answer choices
Forward price = $704.96
Forward price = $726.11
Forward price = $769.68
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
13th edition
1285198840, 978-1285198842
