单选题
Consider the following Treasury spot rates expressed as annual bond equivalent yields:
|
Maturity |
Spot Rate |
|
6 months
1 gear
1.5 years |
3.0%
3.5%
4.0%
4.5% |
Two Treasury notes each with $1000 par values have two years remaining to maturity. Allowing for rounding to the nearest dollar, Treasury note 1 hasA. 4% semiannual coupon and is priced at $991, and Treasury note 2 hasA. 5% semiannual coupon and is priced at $1008. What can you conclude about the market prices of these two notes? Treasury note 1 Treasury note 2 A. Correctly priced Underpriced B. Overpriced Underpriced C. Correctly priced Correctly priced