Consider a forward contract to buy a ten-year bond in one year; currently the eleven-year bond has a coupon rate of 6%,paid semi-annually with a price of $980.The current and effective risk-free rate of interest is 5%.What is the fair forward price?
A) $1,029.05
B) $969.05
C) $933.33
D) $968.26
Correct Answer:
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