Question: We expect that a bond yield will shortly drop by 0 , 2 5 % . The bond sensitivity is 5 % , the YTM
We expect that a bond yield will shortly drop by The bond sensitivity is the YTM is and its dirty price How much SAR we should pay for the investment effective value if we want to have a SAR for that YTM decrease?
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
To calculate the effective value price of the bond when the yield drops by 025 w... View full answer
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
