USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 93

Multiple Choice

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 20-year, Aa 8 percent coupon bond priced to yield 10 percent. As a swap candidate you are considering a 20-year, Aa 10 percent coupon bond priced to yield 10.75 percent. Assume a reinvestment rate of 12.00 percent, semiannual compounding, and a one-year workout period.

-Refer to Exhibit 13.6. The value of the swap is ____ basis points in one year.

• A) 40.4
• B) 60.6
• C) 80.8
• D) 20.5
• E) 100.1

---

Definitions:

Burial and Temple Mounds

Earthen structures built by various Indigenous cultures of North America for ceremonial, burial, and religious purposes.

Chronology

In art history, the dating of art objects and buildings.

Mesoamerica

The region that comprises Mexico, Guatemala, Belize, Honduras, and the Pacific coast of El Salvador.

Deciphering

The process of interpreting or making sense of text, symbols, or codes that are not immediately understandable.