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Determine the yield on the month security

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Assuming the price of a 3 month security is $99.35 and the price of a 6 month security is $98.75, determine the yield on the 3 and 6 month security. Determine your yield if you ride the yield curve by purchasing the 6 month security and liquidate it after 3 months. Assume that there is no change in the yield curve over this period. Then assume, after purchasing the 6 month security there is a 100 basis point shift down in the yield curve. Determine your yield in this example by riding the yield curve.

Reference no: EM133069862

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