Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Consider 10.0 percent Swiss franc/U.S. dollar dual-currency bonds that pay $666.67 at maturity per SF1,000 of par value. It sells at par.
What is implied price of the bond based on the implicit SF/$ exchange rate at maturity? Will the investor be better or worse off at
maturity if the actual SF/$ exchange rate is SF1.50/$1.00? (Do not round intermediate calculations. Round your answer to 2 decimal
places.)
Implied bond price
Investors Position
Worse
Better
Worse
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Transcribed Image Text:Consider 10.0 percent Swiss franc/U.S. dollar dual-currency bonds that pay $666.67 at maturity per SF1,000 of par value. It sells at par. What is implied price of the bond based on the implicit SF/$ exchange rate at maturity? Will the investor be better or worse off at maturity if the actual SF/$ exchange rate is SF1.50/$1.00? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Implied bond price Investors Position Worse Better Worse
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