RB_CH02_Q048. Top issuer swap curve
difficulty ·answer type: boolean·✓Not solved
Problem
Suppose a 'top issuer' (i.e., highest-rated financial institution used as a reference in setting the swap curve) issues a corporate bond for itself valued at 100. The issuer then re-prices this bond using the swap curve. What price do they get (100, above 100, or below 100)? To clarify, they fix the coupon rate of the bond so that it is priced at par, and then they try pricing this same bond by discounting those previously set coupons using the swap curve. Is the answer at, above par, or below par?
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