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16.The conversion factor for a bond is approximately
The price it would have if all cash flows were discounted at 6% per annum
B.The price it would have if it paid coupons at 6% per annum
C.The price it would have if all cash flows were discounted at 8% per annum
D.The price it would have if it paid coupons at 8% per annum
The price it would have if all cash flows were discounted at 6% per annum
B.The price it would have if it paid coupons at 6% per annum
C.The price it would have if all cash flows were discounted at 8% per annum
D.The price it would have if it paid coupons at 8% per annum
Answer: A
The calculation of the conversion factor involves discounting the cash flows on the bond at 6%.
The calculation of the conversion factor involves discounting the cash flows on the bond at 6%.
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015