The six-month zero rate is 10 per annum a bond is issued, Ask an Expert

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The six-month zero rate is 10% per annum. A bond is issued today that has a life of 12 months, a face value of $100, and pays a coupon of 5% per annum (with semiannual payments).

The yield on the bond is 7% per annum. Assume all rates are continuously compounded.

What is the bond's market price? What is the 12-month zero rate?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92822842

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