Answered: What was the market price on 2/1/2023…

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Finance

What was the market price on 2/1/2023 of that Treasury coupon bond SVB purchased a year ago?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 15P

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Question

Now a year later on 2/1/2023, YTM was up at 4%. What was the market price on 2/1/2023 of that Treasury coupon bond SVB purchased a year ago? (hint: was it still a 10-year bond?)

Then assuming this typical Treasury bond accounted for $100 billion out of $200 billion of SVB's total asset (SVB total liability=$190 billion, total equity=$10 billion), think about whether SVB on 2/1/2023 has enough total asset to cover total liability.

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