Question
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 = $726.11 Forward price = $704.96 Forward price = $769.68
Please show work so I can understand how you got the answer, Thanks!
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Fixed Income Markets And Their Derivatives
Authors: Suresh Sundaresan
3rd Edition
0123850517, 978-0123704719
