CFA Practice Question

CFA Practice Question

Which of the following is most likely correct?
A. The 10 year spot rate equals the yield on a 10 year Treasury bond with 10 years left to maturity.
B. The clean price and dirty price will be equal immediately after the coupon payment.
C. An embedded option valuable to an issuer would be Floor on a Floating Rate Bond.
Explanation: The yield of a 10 year Treasury is a determined by the spot rates for all future points in time where the Treasury generates cash flows (that is coupon payments and maturity payment).

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