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A one year bond with semi-annual compounding has yield-to-maturity of 4.6%. The face value is $1000 and the semi-annual coupons are $50 (paid in 6
A one year bond with semi-annual compounding has yield-to-maturity of 4.6%. The face value is $1000 and the semi-annual coupons are $50 (paid in 6 months and 12 months). A 6 month bond with semi-annual compounding has yield-to-maturity of 4.3%. (a) "Strip the yield curve" in order to find the price of a bond (face value $1000) which pays semi-annual coupons of $100. (b) Write down the equation you would need to solve to find the yield-to-maturity of the bond described in (a). Do not attempt to solve this equation
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