D Question 1 1.55 pts Assume that you are a bond dealer. You buy a...

60.1K

Verified Solution

Question

Finance

image

D Question 1 1.55 pts Assume that you are a bond dealer. You buy a 3.5 year bond, with a coupon of 11.15% and a YTM of 11.02%. The par value is $100. The following spot curve is in effect. Time in Time in Periods Theoretical Annual Spot Rate Years 0.5 1 1 2 1.5 3 2 4 8.00% 8.30% 8.93% 9.25% 9.47% 9.79% 10.13% 2.5 5 3 6 3.5 7 You want to sell the bond's third year cash flow to a third party. You are only selling one cash flow!! This is the cash flow that occurs at the end of three years. What will you charge for it? (Round to two digits, e.g. 12.4562 would be 12.46, and do not include a dollar sign)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students