Exhibit 19.11 Use the Information Below for the Following Problem(S)

question 70

Multiple Choice

Exhibit 19.11
Use the Information Below for the Following Problem(S)
Consider two bonds, both pay semiannual interest. Bond X has a coupon of 7% per year, maturity of 20 years, yield to maturity of 8% per year, and a face value of $1000. Bond Y has a coupon of 7% per year, maturity of 20 years, yield to maturity of 8.5% per year, and a face value of $1000.
-Refer to Exhibit 19.11.Calculate the value of swap out of Bond X into Bond Y.

• A) 0.38%
• B) 0.81%
• C) 1.94%
• D) 3.76%
• E) 4.12%