The current market price of a 5-year zero-coupon bond is $654.321. The face value of the bond is $1,000.00. Then, what is the continuous compounded yield per annum (annualized yield compounded continuously) on this bond? [If an investor holds the bond till its maturity, then this yield is also known as the holding period return.]
The current market price of a 5-year zero-coupon bond is $654.321. The face value of the bond is $1,000.00. Then, what is the continuous compounded yield per annum (annualized yield compounded continuously) on this bond? [If an investor holds the bond till its maturity, then this yield is also known as the holding period return.]
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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The current market price of a 5-year zero-coupon bond is $654.321. The face
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