Question: wLULI. 10- USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM The following information is given concerning a pure yield pick-up swap: You currently hold a

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wLULI. 10-\" USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM The following information is given concerning a pure yield pick-up swap: You currently hold a 20-year, Aa 2 percent coupon bond priced to yield 9.5 percent. As a swap candidate, you are considering a 20-year, Aa 14 percent coupon bond priced to yield 10.00. Assume a reinvestment rate of 11 percent, semiannual compounding, and a one-year workout period. Current Bond Candidate Bond Dollar Investment $1,222.04 $1,343.18 W i on One Coupon 3.3 ? Principal Value at Year End 1,218.04 ? Total Accrued 1,341.34 ? Realized Compound Yield 9.535196 ? Refer to Exhibit 12.8. The interest on one coupon for the candidate bond is

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