Go to Bloomberg Market Rates & Bonds(Links to an external site.) ...

Question

Go to Bloomberg Market Rates & Bonds(Links to an external site.)  (https://www.bloomberg.com/markets/rates-bonds) and review the  “Americas 10 Year Government Bond Yields” section. What is the 10 year  rate on a 10 Year US Bond? Then select a bond that is not an Americas  bond. What is the yield on that bond? Should you pay more or less for  that foreign bond in US Dollars? Describe in 200 – 300 words why you  chose that bond and your calculations supporting your answer. Be sure to  respond to at least two of your classmates’ postings.

Shakeel · Accepted Answer

The yield on 10-yers US Treasury Bond is 1.94%
The current market price is $98.25
The yield on 10-years UK Treasury Bond is 0.79% 
The current market price is £100.80
Now, the current exchange rate between US dollar and Pound is £0.78 per USD
Therefore, to purchase 10-years UK Treasury Bond, we must have to pay now is 100.80 / 0.78 i.e. $129.23
Therefore, we would have to pay in USD to purchase 10 years UK Treasury Bond.
According to Malkiel G (1962),

Go to Bloomberg Market Rates & Bonds(Links to an external site.) (https://www.bloomberg.com/markets/rates-bonds) and review the “Americas 10 Year Government Bond Yields” section. What is the 10 year...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment