Sales & Trading Interview Questions
Can someone please provide answers to the following questions:
2. I buy a 7 year par bond paying 8% annual. What is the YTM? If I wait 1 year and sell it at a YTM of 7%, how much money do I have?
3. I have a 10 year 6% bond. What is the maximum price this bond could ever reach? Why?
4. If interest rates drop 20 basis points, how much does a zero coupon 2yr bond's price increase/decrease?