Question
You tell your broker you want to buy a 20-year government bond. He has one for sale that pays a 5% coupon. The going rate
You tell your broker you want to buy a 20-year government bond. He has one for sale that pays a 5% coupon. The going rate for a typical 20-year Treasury is 7.5%. Assume a Par Value of $100. Shortly after you buy the bond, the YTM on 20-year bonds rose to 9.5%.
How much money did you lose?
$24.92
$14.17
$14.28
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Elements Of Financial Risk Management
Authors: Peter Christoffersen
2nd Edition
0128102357, 9780128102350
