RB_CH03_Q009. Six-month forward on 10-year discount bond
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Problem
Consider a six-month forward contract on a 10-year riskless discount (zero-coupon) bond. 1. Is the bond selling at a forward premium or a forward discount? 2. Does your answer change if the bond is a riskless coupon bond (assume the coupon rate exceeds the current risk-free rate)?
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