Exhibit 19 -Refer to Exhibit 19

question 23

Multiple Choice

Exhibit 19.1
Use the Information Below for the Following Problem(S)
The following information is given concerning a pure yield pick-up swap: You currently hold a 10 year, 7 percent coupon bond priced to yield 8 percent. As a swap candidate you are considering a 10 year, 8 percent coupon bond priced to yield 9 percent. Assume a reinvestment at 9 percent, semiannual compounding, and a one-year workout period.
$$\begin{array} { l c c } & \text { Current Bond } & \text { Candidate Bond } \\\hline \text { Dollar Investment } & \$ 932.05 & \$ 934.96 \\\text { Caupan } & \$ 70.00 & \$ 80.000 \\\text { i an One Coupon } & \$ 1.575 & ? \\\text { Principal Value at Year End } & \$ 936.70 & ? \\\text { Total Accrued } & \$ 1008.28 & ? \\\text { Realized Compound Yield } & 8.018 \% & ?\end{array}$$
-Refer to Exhibit 19.1.The value of the swap is ____ basis points in one year.

• A) 32.3
• B) 48.7
• C) 75.8
• D) 98.2
• E) 104.3

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Definitions:

Linear Effect

A relationship or influence where a change in one quantity results in a proportional change in another quantity.

Task Variables

Factors within a task or work environment that can influence the performance, engagement, and outcomes of those undertaking the task.

Dispositional Traits

Fundamental personality characteristics that are relatively stable over time and across situations, influencing individual behavior.

Cultural Background

The cultural environment in which a person was raised or identifies with, encompassing heritage, tradition, language, and customs.