All bonds today have a nominal value of 500 darkos per. PCS.

Table 1 shows the current prices and effective annual interest rates for risk-free government bonds with a payment profile corresponding to standing loans.

Table 1: Selected "zero coupon bonds" of the type of standing loans (rounded entries)

 Maturity (years)            Market price today (darkos)       Effective annual interest rate

Question(s):

Determine (i) the year's yield on a 2-year risk-free bond with a nominal value of 500 darkos, a nominal annual interest rate of 10% and a payment profile as an annuity loan, and (ii) the current rate for such a bond

123456 502,5126 505,0378 485,2951 476,7031 464,1302 443,9857 -0,5000% -0,5000% 1,0000% 1,2000% 1,5000% 2,0000%