Question: What is a cash flow arbitrage strategy involving convertible bonds
What is a cash flow arbitrage strategy involving convertible bonds?
Answer to relevant QuestionsWhat is the difference between a soft put and a hard put? Consider a convertible bond as follows: par value = $1,000; coupon rate = 9.5% market price of convertible bond = $1,000 conversion ratio = 37.383 estimated straight value of bond = $510 yield to maturity of straight bond = ...Answer the below questions. (a) If the correlation between changes in Treasury rates and changes in the credit spread is zero, what is the duration multiplier? (b) If during a time period the correlation between changes in ...(a) What is meant by the empirical duration of a corporate bond? (b) How is the empirical duration of a corporate bond estimated? Answer the below questions. (a) What is meant by working capital? (b) Why is an analysis of working capital important?
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