Assume the SEP 10-yr T-Note Future just settled at a price of 152-17. The cheapest- to-deliver (CTD) Treasury bond costs 133-12 in the market, has a term of exactly 21 years left and carries a coupon of 4.0%. With respect to settling the Future, which of the following statements is accurate when the above CTD bond is delivered? The Long will pay $116,379 to the Short The Long will pay $134,455 to the Short The Long will pay $176,439 to the Short

Assume the SEP 10-yr T-Note Future just settled at a price of 152-17. The cheapest- to-deliver (CTD) Treasury bond costs 133-12 in the market, has a term of exactly 21 years left and carries a coupon of 4.0%. With respect to settling the Future, which of the following statements is accurate when the above CTD bond is delivered? The Long will pay $116,379 to the Short The Long will pay $134,455 to the Short The Long will pay $176,439 to the Short

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Calculate the YTM based on the information provided and explainthe difference between the Yield to Maturity rate and the originalcoupon rate. YTM Bond Details: A bond is currently selling for $850 with 15 years until it matures.The bond has a current coupon rate of 6% and makes paymentssemi-annually. You purchase the bond today 1/1/2023 as yoursettlement date and you are interested in knowing what the YTMwill be. **Note, when calculating the YTM the bond price (% of par)and face value (% of par) will not be percentages, please usenumbers for their respective section. The Yield Calculation is alreadybuilt into excel, all you have to do is type is =yield.
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