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136

16.The conversion factor for a bond is approximately

The price it would have if all cash flows were discounted at 6% per annum

B.The price it would have if it paid coupons at 6% per annum

C.The price it would have if all cash flows were discounted at 8% per annum

D.The price it would have if it paid coupons at 8% per annum

The price it would have if all cash flows were discounted at 6% per annum

B.The price it would have if it paid coupons at 6% per annum

C.The price it would have if all cash flows were discounted at 8% per annum

D.The price it would have if it paid coupons at 8% per annum

Answer: A

The calculation of the conversion factor involves discounting the cash flows on the bond at 6%.

The calculation of the conversion factor involves discounting the cash flows on the bond at 6%.

Flashcard info:

Author: CoboCards-User

Main topic: Finance & Investment

Topic: Derivatives

Published: 27.10.2015