Question regarding the price of the bond
A $1,000 bond that matures in 10 years and has a coupon of 5 percent is selling for $690. What is the current yield? What is the yield to maturity? If five years later the yield to maturity is 10 percent, what will be the price of the bond?
Now Priced at $5 (50% Discount)
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If you plan to hold the options positions to maturity, devise a zero-net-investment arbitrage strategy to exploit the pricing anomaly. Draw the profit diagram at maturity for your position.
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A treasury bond has a face value of $30,000 and a quoted price of 102:20. What is the bonds dollar price?
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