Assume a four-year maturity float-rate bond. Par value is $1,000. Its discount rate is LIBOR+3%. The discount
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Assume a four-year maturity float-rate bond. Par value is $1,000. Its discount rate is LIBOR+3%. The discount rate for fixed cash flows is 5%. Its coupon rate is LIBOR+1%. a. What is the price of this floater? b. What is the modified duration of this floater? c. What is the convexity of this floater?
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