USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 33

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 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.

-Refer to Exhibit 13.4. 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:

Heck Reaction

A palladium-catalyzed coupling reaction between an aryl halide and an alkene to form a substituted alkene.

Organocuprate Coupling

A type of organic reaction that involves coupling an organocuprate compound with an organic halide or an alkyne to form a new carbon-carbon bond.

Birch Reduction

A chemical reaction that reduces aromatic rings to cyclohexadienes using sodium or lithium in liquid ammonia, often with an alcohol as a proton source.

T-Butylbenzoic Acid

T-Butylbenzoic Acid is an organic compound with the structure derived from benzoic acid where a tert-butyl group is attached to the benzene ring.