A 27-year bond, with a price equal to 75% of its face value, offers annual coupons with the coupon rate equal to 217 of the annual effective yield rate. An n-year zero-coupon bond has the same price, face value, and yield rate. Calculate n. A 5 B 7 C 9 D 11 E 13

A 27-year bond, with a price equal to 75% of its face value, offers annual coupons with the coupon rate equal to 217 of the annual effective yield rate. An n-year zero-coupon bond has the same price, face value, and yield rate. Calculate n. A 5 B 7 C 9 D 11 E 13

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

A 27-year bond, with a price equal to 75% of its face value, offers annual
coupons with the coupon rate equal to 217 of the annual effective yield rate.
An n-year zero-coupon bond has the same price, face value, and yield rate.
Calculate n.
A 5
B
7
C
9
D
11
E
13

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