Question: (a) Define and explain how STRIPs are created and priced in the market? What are the possible uses of STRIPs? Consider the following quotes of

(a) Define and explain how STRIPs are created and priced in the market? What are the possible uses of STRIPs? Consider the following

(a) Define and explain how STRIPs are created and priced in the market? What are the possible uses of STRIPs? Consider the following quotes of STRIPs as of October 15, 2020: (b) Using the date in the above table, draw the Yield curve over the next 10 years. (c) Using the prices of the STRIPs, what is expected price today of a 6 year 2.25% bond? What is the YTM of the Bond? (d) If the Bond is selling for $935 today, is there an arbitrage opportunity and how would you exploit it? (a) Define and explain how STRIPs are created and priced in the market? What are the possible uses of STRIPs? Consider the following quotes of STRIPs as of October 15, 2020: (b) Using the date in the above table, draw the Yield curve over the next 10 years. (c) Using the prices of the STRIPs, what is expected price today of a 6 year 2.25% bond? What is the YTM of the Bond? (d) If the Bond is selling for $935 today, is there an arbitrage opportunity and how would you exploit it

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