Exhibit 16-6
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 30

Multiple Choice

Exhibit 16-6
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
The following information is given concerning a substitution swap: You currently hold a 25 year, Aa 10% coupon bond priced to yield 12%. As a swap candidate you are considering a 25 year, Aa 10% coupon bond priced to yield 13%. Assume a reinvestment rate of 12%, semiannual compounding, and a one-year workout period. $\begin{array}{lcc}&\text { Current Band } & \text { Candidate Band } \\\hline\text { Dollar Investment } & \$ 842.38 & ? \\\text { Coupon } & 100.00 & 100.00 \\\text { i on One Coupon } & 3.0 & 2.75 \\\text { Principal Value at Year End } & 843.50 & 780.46 \\\text { Total Accrued } & 946.50 & 883.21 \\\text { Total Gain } & 104.12 & ? \\\text { Gain per Invested Dollar } & ? & ? \\\text { Realized Compound Yield } & ? & ?\end{array}$

-Refer to Exhibit 16-6. The value of the swap is ____ basis points in one year.

• A) 94.14
• B) 0.9414
• C) 9.414
• D) 941.4
• E) 0.09414

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Definitions:

QSEN Competency

Quality and Safety Education for Nurses, competencies that focus on the preparation of nurses with the knowledge, skills, and attitudes necessary for continuously improving the quality and safety of the healthcare systems within which they work.

Accountability

State of being answerable for one's actions—a nurse answers to himself or herself, the patient, the profession, the employing institution such as a hospital, and society for the effectiveness of nursing care performed.

Fluid Status

A medical term referring to the balance of fluids within the body, including hydration levels and distribution of fluids in tissues.

Sanitation Techniques

Methods used to maintain cleanliness and prevent the spread of disease.