1 You buy a 7.5% coupon corporate bond and owe 1.10417% (of face) accrued interest...
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Finance
1 You buy a 7.5% coupon corporate bond and owe 1.10417% (of face) accrued interest at settlement.
How many days do you own the bond when you receive your first coupon payment? (round to the nearest whole number of days)
2 You are building out a yield curve to 18 months using a 1.27% coupon $100,000 18-month semi-annual Treasury Note. You notice that the 6-month T-Bill rate is 0.74% and the 12-month T-Bill rate is 0.86%. What is the present value of the stripped 12-month coupon (rounded $ to two places after the decimal)?
3 Your portfolio consists of an index mutual fund which represents the overall market and Treasury bills. The mutual fund has a portfolio weight of 75%. The risk-free rate is 2% and the market risk premium is 7.7%. What is your best estimate for your portfolio's expected rate of return?
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