fully hedged return

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You are a fixed income fund manager based in UK. A Hungarian government bond paying annual 8.5% coupon with one year remaining life is trading at 99.55. Spot rate of HUF/GBP is 350.72, one year forward HUF/GBP is 356.35. Calculate the fully hedged return if you invest in this bond.

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See the attached file. hope this will help. Thanks

You are a fixed income fund manager based in UK. A Hungarian government bond paying annual 8.5% coupon with one year remaining life is trading at ...

Solution Summary

The expert calculates the fully hedged return if you invest in this bond. The spot rate of HUF/GBP is found.

$2.19