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onsider the following questions with regard to the topic of bond: a) A zero-coupon bond with a $1000 face value has 5 years to maturity.
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onsider the following questions with regard to the topic of bond: a) A zero-coupon bond with a $1000 face value has 5 years to maturity. The bond 2
currently trades at $500. What is the yield to maturity of this bond? b) Consider a 2-year bond with a face value of $1000 and coupons paid semiannually. If 2
the market interest rate implies a yield to maturity of 5%, what should be the coupon rate offered if the bond is to be traded at par?
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