Question: This is the only information that I have Problem 35 points = 8 minutes) You are working as a fored income trader within an investment
Problem 35 points = 8 minutes) You are working as a fored income trader within an investment bank. A client asks you to show a price for a $1000 par, 5% coupon (nominal rate) US Treasury bond with 7 years remaining in its life. Coupons are paid semiannually and the next coupon payment is exactly see months away. You show her the following bid-ask expressed in yield to maturity: Bid Ask 5.90% 3.a If your client wants to buy this band from you, which rate would you trade at 3.b if you manage to buy and then sell this bond, in the same day, at your bid and ask prices shown above, what is the profit or loss (p&I) in dollars that you will make per bond? Problem 3. (5 points - 8 minutes): You are working as a fixed income trader within an investment bank. A client asks you to show a price for a $1000 par, 5% coupon (nominal rate) US Treasury bond with 7 years remaining in its life. Coupons are paid semiannually and the next coupon payment is exactly six months away. You show her the following bid-ask (expressed in yield to maturity): Bid Ask 6% 5.90% 3.a If your client wants to buy this bond from you, which rate would you trade at? 3.b If you manage to buy and then sell this bond, in the same day, at your bid and ask prices sho above, what is the profit or loss (p&l) in dollars that you will make per bond? Problem 35 points = 8 minutes) You are working as a fored income trader within an investment bank. A client asks you to show a price for a $1000 par, 5% coupon (nominal rate) US Treasury bond with 7 years remaining in its life. Coupons are paid semiannually and the next coupon payment is exactly see months away. You show her the following bid-ask expressed in yield to maturity: Bid Ask 5.90% 3.a If your client wants to buy this band from you, which rate would you trade at 3.b if you manage to buy and then sell this bond, in the same day, at your bid and ask prices shown above, what is the profit or loss (p&I) in dollars that you will make per bond? Problem 3. (5 points - 8 minutes): You are working as a fixed income trader within an investment bank. A client asks you to show a price for a $1000 par, 5% coupon (nominal rate) US Treasury bond with 7 years remaining in its life. Coupons are paid semiannually and the next coupon payment is exactly six months away. You show her the following bid-ask (expressed in yield to maturity): Bid Ask 6% 5.90% 3.a If your client wants to buy this bond from you, which rate would you trade at? 3.b If you manage to buy and then sell this bond, in the same day, at your bid and ask prices sho above, what is the profit or loss (p&l) in dollars that you will make per bond
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