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A one-year zero coupon bond will pay off face value of $100 with a probability of 0.95 and will pay off nothing with a probability
A one-year zero coupon bond will pay off face value of $100 with a probability of 0.95 and will pay off nothing with a probability of 0.05 . The equivalent risk-free rate of return is 7%. What is an appropriate promised yield on this bond? (Submit your answer in decimals, not in percentages.) Step by Step Solution
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Financial Management For Public, Health, And Not-for-Profit Organizations
Authors: Steven A. FinklerDaniel L. Smith, Thad D. Calabrese
6th Edition
978-1506396811, 150639681X
