Reading 24 EOC 27

CFA Level III Fixed Income
#1

Just wanted to check/confirm/ask about this EOC question.

  1. For the local market return calculation of the mexican peso to get that return, where the price of the yield decreased to 7. To get the value of the 100.9501; I entered into the calculator FV = 100, pmt = 3.625, i/y = 3.5, n = 4.5 and computed the pmt to be 100.950961. Just wanted to make sure that methodology was correct.

  2. Still a little fuzzy on the explanation given in the back for the projected yields remaining unchanged for the US,UK, EURO and Greek. Since, the 5 year still priced at PAR that means in 6 months time the local market return is (100 + the 5 yr yield/2) /100 ?

Thanks in advance