14. What is the Yield to Maturity of a five-year, Semi-Annual Euro denominated b

Question

14. What is the Yield to Maturity of a five-year, Semi-Annual Euro denominated bond with a 2.5% annual coupon, selling at 93% of par value? Show work.

a. Approx 1%
b. Approx 2%
c. Approx 3 %
d. Approx 4%
e. Approx 5%


15. If a similar US dollar denominated bond yielded 6.0%, which bond has the higher yield after inflation? Is the difference less than .2%? Assume the current spot is $1.2200/E and one-year forward is $1.2450/E. Show work.

a. US Bond, no
b. US Bond, yes
c. Euro Bond, no
d. Euro Bond, yes
e. Can

Explanation / Answer

14) b 15) a 16) e

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