Could anyone please help with this problem? When reconstituting 250 million dollars in US Treasury strips. 6.5 maturing in three years What is the Par value and market value needed to satisfy this
Are we reconstituting Treasuires from strips? Assuming the 250 is par value…Just get strips for each coupon payment (6 of them I suppose = 6.5%/2 * 250M * 6) and strips for principal = 250 M. Total is par value of $290 M or close. Can’t get market value because we don’t know anything about spot rate curve from your question.