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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Bond B is a 2-year maturity coupon-paying bond with annual coupon of 10 and face value of 110. The yield curve is flat at 4% per year. Consider a forward contract F on one bond B. If the forward F's maturity is 15 months from now, what is the no-arbitrage forward price F0, 15 months? Enter your answer with 2 decimal places after the point.
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