A) An investment bank creates STRIPS from $10,000,000 U.S. 3.00% coupon rate Treasury bond due in seven years. The banker paid 93.95% of face value for it for a yield to maturity of 4.00%. What is the Price (in percent of face value) of the bond due in three years if it can be sold at a price to yield of 3.50%?

B) Same STRIP as before: An investment bank creates STRIPS from $10,000,000 U.S. 3.00% coupon rate Treasury bond due in seven years. The banker paid 93.95% of face value for it for a yield to maturity of 4.00%. What is the Price (in percent of face value) of the bond due in three years if it can be sold at a price to yield of 3.50%?

C) Same STRIP as before: An investment bank creates STRIPS from $10,000,000 U.S. 3.00% coupon rate Treasury bond due in seven years. The banker paid 93.95% of face value for it for a yield to maturity of 4.00%. What is the Price (in percent of face value) of the principal amount (due in seven years) price to yield of 3.90%?

Answer rating: 100% (QA)

Quiz a In order to find the price we need to use the following formula Price yield to maturity 1 1 y... View the full answer