The Cipher Corporation issued a zero-coupon that matures in eight years. Suppose you purchased one of these
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The Cipher Corporation issued a zero-coupon that matures in eight years. Suppose you purchased one of these bonds with a maturity value of $1,000 for $400 on January 1, Year 1.
The bond was issued at $400. This bond matures on December 31, Year 8.
a. If you bought this bond when it was issued for $400 and held it to maturity, what return would you earn?
b. What is the amount of interest expense per bond that Cipher deducts each year per $1,000 maturity value?
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Related Book For 
Financial Management And Analysis (Frank J. Fabozzi Series)
ISBN: 9780471477617
2nd Edition
Authors: Frank J. Fabozzi, Pamela P. Peterson
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