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Suppose that an annual 10-year coupon bond with a coupon of 5% and a principal...

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Suppose that an annual 10-year coupon bond with a coupon of 5% and a principal of 100 has a price of 101. Suppose also that an annual 10-year floating-rate bond with a coupon rate of ri(t-1) and a principal of 100 is traded at an arbitrage-free price. What is the price of a 10-year security that pays an annual coupon of 10%-r1(t-1) and a principal of 100 at t=10. a) 102 Ob) 98 Oc) 101 od) 99 e) None of the other alternatives is correct

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