1. A Treasury bond's price is quoted as 119:27. What is the price of one bond that has a par value of $1,000?
2. Aloro would like to borrow $11m for 1 year(s). They will pay off the loan, in full, with probability 95.0%. However, if they enter financial distress, which has a likelihood of 5.0%, their assets will be sold for $10m and they will incur bankruptcy costs of $1.8m. Assume that b
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06 Mar 2016