What is the “dirty” price of a bond?
Answer to relevant QuestionsExplain why you agree or disagree with the following statement: “The price of a floater will always trade at its par value.” (a) If the discount rate that is used to calculate the present value of a debt obligation’s cash flow is increased, what happens to the price of that debt obligation? (b) Suppose that the discount rate used to calculate ...Suppose that the coupon rate of a floating-rate security resets every six months at a spread of 70 basis points over the reference rate. If the bond is trading at below par value, explain whether the discount margin is ...What is the effective annual yield if the semiannual periodic interest rate is 4.3%? Consider the following two Treasury securities: Which bond will have the greater dollar price volatility for a 25-basis-point change in interest rates?
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