Question
A one-year zero-coupon risk-free bond with a face value of $1,000 is selling for $971.29. A two-year zero-coupon risk-free bond with a face value
A one-year zero-coupon risk-free bond with a face value of $1,000 is selling for $971.29. A two-year zero-coupon risk-free bond with a face value of $1,000 is selling for S906.78. If a three-year risk-free bond with a face value of $1,000 that pays 11.2% annual coupons has a price of $934.99, what must be the three-year zero-coupon bond rate on the yield curve? a. 14.70% Ob. 15.34% Oc. 17.61% O d. 16.14% O e. 18.08%
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
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