Consider the following ﬂoating rate bond: it has a face value of $100. Each half
year it pays coupon based on the current market returns over the half year that
has just ended. That is, if the market returns 3% from 15 January to 15 July
then the bond pays $3.
The bond matures in 10 years’ time, at which point the $100 face value is
returned to the purchaser.
How much would you pay for this ﬂoating rate bond? Why?

It any one knows pls help
Thx soooo Much!!

Question

Consider the following ﬂoating rate bond: it has a face value of $100. Each half
year it pays coupon based on the current market returns over the half year that
has just ended. That is, if the market returns 3% from 15 January to 15 July
then the bond pays $3.
The bond matures in 10 years’ time, at which point the $100 face value is
returned to the purchaser.
How much would you pay for this ﬂoating rate bond? Why?

It any one knows pls help 
Thx soooo Much!!

tkhunny · Answer

Kind of a strange question, I think.  We can't have NO clue for the market during the lifetime of the Bond.