A bond will be issued now at price USD 2,071,779,815 and maturity value USD 2,499,000,000 after 4 years @ 7% per annum. Bond will be redeemed in 6 equal instalments starting from the end of the 18th month from the issue date and each 6-months thereafter. I need formula for the ...
A redemption price is the amount that an issuer pays if he or she chooses to call or redeem a bond issue or a preferred stock...
we manage to obtain a closed form valuation formula for the note value. We propose several numerical schemes for pricing the note under the one-factor and two-factor short rate models. Pricing behaviors of the target redemption note are also explored. 1 INTROUDCTION A target redemption note is...