Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a. [1 pt] What is the average life of a zero-coupon bond? Answer: For a zero-coupon bond, all t>0 CFs (principal, or interest) are 0,

image text in transcribed
image text in transcribed
a. [1 pt] What is the average life of a zero-coupon bond? Answer: For a zero-coupon bond, all t>0 CFs (principal, or interest) are 0, except for the one at date T. The sums therefore collapse to 7= 1 x0+2 x 0+...+T x PCF(T 0+0+...+ PCF (T) =T

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance and Public Policy

Authors: Jonathan Gruber

5th edition

1464143331, 978-1464143335

More Books

Students also viewed these Finance questions

Question

List the characteristics of wellset goals.

Answered: 1 week ago

Question

Identify and describe the different kinds of sport consumers.

Answered: 1 week ago