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1. A $100 face value 1-YEAR zero-coupon bond trades at $96.30. What is the effective annual rate? 2. Write the formula for a Sharpe

 

1. A $100 face value 1-YEAR zero-coupon bond trades at $96.30. What is the effective annual rate? 2. Write the formula for a Sharpe Ratio. Do you want to own a portfolio with a high or low Sharpe Ratio?

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