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a) The interest rate is 5 percent per year. Compute the six-month zero-coupon bond price using a compound interest rate with monthly compounding. b) The
a) The interest rate is 5 percent per year. Compute the six-month zero-coupon bond price using a compound interest rate with monthly compounding.
b) The interest rate is 5 percent per year. Compute the six-month zero-coupon bond price using a continuously compounded interest rate.
c) The interest rate is 5 percent per year. Compute the six-month zero-coupon bond price using a bankers discount yield (the zero-coupon bond is a US T-bill with 180 days to maturity).
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