If the coupon rate is higher than the forward rate, wont more people buy this bond to take advantage of the higher coupon rate, which in turn will force the bond prices go upwards to a level where no arbitrage will be possible.
Hi David. I am having trouble with understanding this question and answer 1.19 related to Expected Shortfall in Book 4 chapter 1 Measures of Financial Risk, page 12.
Specifically, I am unable to understand this term (0.05-0.0009-0.0042)*9 and why it is added here. I was wondering if you could...