A bond is issued for $100,000,000 for 25 years, amortizing
quarterly. It was issued at par with a
yield of 5% (at inception the coupon was also 5%). 18
years have gone by. At 18 years, the coupon remains at
5% but the yield has dropped to 3% YTM.
a. Provide
the estimated price factor.
b. If
the bid/ ask price is 93/95, as an investor with $200,000, how many
of these bonds can you buy?
c. Excluding
accrued interest, after you buy the bonds, what...