Question
A ten-year zero coupon bond pays $1,000 in ten years (with no other payments). If you hold this bond for one year, it will
A ten-year zero coupon bond pays $1,000 in ten years (with no other payments). If you hold this bond for one year, it will not pay any coupons, but will become a nine-year bond that pays $1,000 in nine years. Assuming you use a constant discount rate of 10% per year, what is the holding period return from holding this bond for one year?
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Advanced Accounting
Authors: Gail Fayerman
1st Canadian Edition
9781118774113, 1118774116, 111803791X, 978-1118037911
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