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A Treasury bond maturing in 6 months, with face value $100, a coupon rate of 5% trades for 99.25. Another Treasury bond maturing in 1-year,
A Treasury bond maturing in 6 months, with face value $100, a coupon rate of 5% trades for 99.25. Another Treasury bond maturing in 1-year, with face value $100, coupon rate of 5% trades for 98.27. What is the 6-month and 1-year risk- free rate of return:
A) 5.4494% and 6.2200% (B) 5.4494 and 12.6330% (C) 10.8800% and 12.6330%
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