looking at page 61, Reading 35 The term structure and interest rate dynamics, do you see somewhere in the question 39 the “annual return” been in question:
In presenting Investment 2, Smith should show a total return closest to:
Additionally, in the following question it is said “lower quality, 2-year corporate bond” and I was thinking that we should add the swap spread and the Z-spread to the government spot rate, but no, only the Z-spread is added. I am probably mislead by the “lower quality” wording here. Do you have the same problems or I am missing something? Frankly, sometimes the wording of the problems to solve is not explicit. Do you have the same thoughts?