The following information relates to a forward contract written on a bond: Bond price = $95 Maturity = 1 year Coupon 1, paid in 6 months = $3; Coupon 2. paid immediately prior to maturity of forward = $2 Riskless rate of interest = 5% What is the forward price? A $94.43 B $85.77 $94.79 D $93.79
The following information relates to a forward contract written on a bond: Bond price = $95 Maturity = 1 year Coupon 1, paid in 6 months = $3; Coupon 2. paid immediately prior to maturity of forward = $2 Riskless rate of interest = 5% What is the forward price? A $94.43 B $85.77 $94.79 D $93.79
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter10: Long-term Liabilities
Section: Chapter Questions
Problem 10.1E
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![The following information relates to a forward contract written on a bond:
Bond price = $95
Maturity = 1 year
Coupon 1, paid in 6 months = $3; Coupon 2, paid immediately prior to maturity of forward = $2
Riskless rate of interest = 5%
What is the forward price?
A) $94.43
B $85.77
c) $94.79
D) $93.79](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb2b71fb6-0c5b-4ee8-9b09-d28169e9d364%2F28d9e3ba-9f5b-4ffa-981e-ff3ecc207f2d%2Fwzghdgg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following information relates to a forward contract written on a bond:
Bond price = $95
Maturity = 1 year
Coupon 1, paid in 6 months = $3; Coupon 2, paid immediately prior to maturity of forward = $2
Riskless rate of interest = 5%
What is the forward price?
A) $94.43
B $85.77
c) $94.79
D) $93.79
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