Question: You purchase a 10-year T-note which has a par value of $1,000 and a yield-to-maturity of 8%. Its coupon rate is 9%. The price of
You purchase a 10-year T-note which has a par value of $1,000 and a yield-to-maturity of 8%. Its coupon rate is 9%. The price of the T-note is ___.
| A. | $1,067.95 | |
| B. | $993.46 | |
| C. | $1,103.28 | |
| D. | $1,090.03 |
You observe that the current yield curve is as follows: r0.5=5.5%, r1=5.6%, r1.5=5.8%, r2=6%, r2.5=6.3%, r3=5.9%. Based on the expectations theory, what is the 6-month forward rate (quoted per annum) six months from today?
| A. | 5.7% | |
| B. | 5.4% | |
| C. | 5.9% | |
| D. | 5.3% |
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