A floating rate bond has a par value of 100 the bond makes, Ask an Expert

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A floating rate bond has a par value of $100. The bond makes semiannual payments based on the sixth month LIBOR at the reset date. The sixth month LIBOR rate 3 months ago (at the last reset date) was 3.00% (annual rate compounded semiannually). Today the three-month LIBOR rate is 4.00% (annual rate compounded quarterly). Assuming the floating bond has no default risk, what is the price today of the bond?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92361638

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