Post a New Question

Capital Markets

posted by .

You work for an underwriter. The underwriter asks you to ¡§strip¡¨ a portfolio of treasury bond. The treasury bonds in question are all identical, they have 5 years to maturity, pay an annual coupon of 7.25% per year, payable annually, and they are currently selling at face, at $ 100 million.
The strips you intend to issue are not the standard interest only (IO) and principal only (PI) strips, but rather different.
Both strips mature in 5 years as well. Each strip has a face of 50 MM. The coupons on both strips depends on an appropriately chosen index of general interest rates.
„«

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

More Related Questions

Post a New Question