Escolar Documentos
Profissional Documentos
Cultura Documentos
• TIPs:
– notional grows with inflation
– %-Coupon stays the same on growing notional
Price $810.71
Coupon = 8%
(semiannual)
$1276.76
60
$40 1000
t 1 (1 r ) (1 r )
t 60
Maturity = 30y
Coupon = 8%
(semiannual)
• Reinvestment Assumptions
• Holding Period Return
–Changes in rates affect returns
–Reinvestment of coupon
payments
–Change in price of the bond
Maturity = 30y
Coupon = 6.5%
(semiannual)
Maturity = 30y
Coupon = 0%
YTM = 10%
O – solvent companies
X – defaulted companies