Consider a Swiss Confederation zero-coupon bond with a par value of CHF100, a remaining time to maturity
Question:
Consider a Swiss Confederation zero-coupon bond with a par value of CHF100, a remaining time to maturity of 12 years and a price of CHF89. In three years’ time, the bond is expected to have a price of CHF95.25. If purchased today, the bond’s expected annualized return is closest to:
A. 0.58 percent.
B. 1.64 percent.
C. 2.29 percent.
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