标题: Last question AM session [打印本页] 作者: maxmeomeo 时间: 2013-4-10 20:01 标题: Last question AM session
Was anyone able to solve the last question in AM session
I thought Interest Rate was missing作者: hariRaj 时间: 2013-4-10 20:09
The question was something like this:
Par of a bond: W
Present mval of bond: X
Future value of coupons: Y
PV of coupons: Z
What’s the price on a forward?
I did it as follows:
The price on a forward should be (X - Z) * (1+r)^t
Although we did not have the values for r and t, there was a choice whose value was exactly X-Z. We know this value is too low. Of the 2 remaining choices, 1 value was even lower so it was not the right answer, and one value was higher so that’s what I picked.
