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U Search this course Homework 4 Evaluate the following pure-yield pickup swap: You currently hold...

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U Search this course Homework 4 Evaluate the following pure-yield pickup swap: You currently hold a 15-year, AA-rated, 9.5% coupon bond priced to yield 11.0%. As a swap candidate, you are considering a 15- year, AA-rated, 10.5% coupon bond priced to yield 12.0%. (Assume reinvestment at 12.0%, $1,000 par value, semiannual coupons.) Do not round intermediate calculations. Round your monetary answers to the nearest cent and percentage answers and value of swap to two decimal places. You may use Appendix to answer the questions Current Bond Candidate Bond Dollar investment $ XS Annual coupon $ I on one coupon $ X $ X Principal value at year end $ X $ Total accrued $ X $ Realized compound yield X% X Value of swap: X basis points in one year Hide Feedback Incorrect Post Submission Feedback Solution Assuming semiannual couponsCurrent and year later prices can easily be found using financial calculator Dollar investment Annual coupon on one coupon Principal value at year end Total accrued Realized compound yield Current Bond 5691.00 595.00 $2.85 $894.09 5991.94 11.039 Candidate Bond 5896.76 5105.00 53.15 $899.45 $1.007.60 12.00

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