Suppose that in an asset swap B is the market price of the bond per dollar of
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Suppose that in an asset swap B is the market price of the bond per dollar of principal, B* is the default-free value of the bond per dollar of principal, and V is the present value of the asset swap spread per dollar of principal. Show that V = B* - B.
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We can assume that the principal is paid and received at the e...View the full answer
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