Question: question 20 needs to be solved. QUESTION 19 On Jan 22, 2020 YTM of available 10-year treasury note is 1.70% (annualized rate), with coupon rate

question 20 needs to be solved. question 20 needs to be solved. QUESTION 19 On Jan 22, 2020

QUESTION 19 On Jan 22, 2020 YTM of available 10-year treasury note is 1.70% (annualized rate), with coupon rate of 1.12% (annualized rate). Coupon is paid every 6 months, 6 months later the YTM of the same bond drops to 0.64% (right before the first coupon payment). Assuming the maturity date of the bond is Jan 22, 2030. With the information above, please answer the following 2 questions. Q1: What is the bond price on Jan 22, 2020? (hint calculate half-year discount rate and coupon payment first. Face value of US 10-year treasury note is $1000.) QUESTION 20 02: What is the US 10-vear treasury note price right before the first coupon payment (hint: if using calculator/excel, set calculator/excel to "annuity due" and compute the bond price. Alternatively, using "annuity due" formula with adjustment for future value)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!