A 5-year bond with a 445 coupon sells for 10748 a 7-year


A 5-year bond with a 4.45% coupon sells for $107.48. A 7-year bond with a 5.75% coupon sells for 116.564. The conversion factor for the 5-year bond is 0.933891 while the 7-year bond is 0.98588. Assume that the yields for both bonds are 6% and that coupon payments are semi annual. Which of the two bonds is cheaper to deliver given a T-note futures price of 117.92?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: A 5-year bond with a 445 coupon sells for 10748 a 7-year
Reference No:- TGS01157731

Expected delivery within 24 Hours