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Assuming semi-annual compounding, what is the price of a zero coupon bond that matures in 3 years if the market interest rate is 5.5 percent?
Assuming semi-annual compounding, what is the price of a zero coupon bond that
matures in 3 years if the market interest rate is 5.5 percent? Assume par value is $1000.
Interest rate per semi-annual= R= 5.5%/2 = 2.75%
Number of periods = N = 3*3 = 6
in the above equation when multiplying 3*3 wouldn't the number of periods be 9?
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