Question: 2 . There is a 1 0 - year ( $ 1 , 0 0 0 ) face value bond with a

2 .

There is a

10 -

year

\ (\

1, 000 \)

face value bond with a

\ (5.5 \ % \)

coupon paid semiannually. From this bond you are going to create a floating rate bond, and an inverse floating rate bond. The floater will have a face value of

\ (\

600 \)

and pay the SOFR reference rate

(

call this rate S

,

similar to how we called the LIBOR rate L

) .

What is the coupon rate of the inverse floater?

$2 . There is a 1 0 - year \ ( \ $ 1 , 0 0 0 \ )$

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