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Semi-Annually Compounded Zero Yields Time(Year) 0.5 1 1.5 2 2.5 3 Zero Yield 1.2% 1.6% 2.0% 2.4% 2.8% 3.2%A mortgage loan is a bond paying
Semi-Annually Compounded Zero Yields Time(Year) 0.5 1 1.5 2 2.5 3 Zero Yield 1.2% 1.6% 2.0% 2.4% 2.8% 3.2%A mortgage loan is a "bond" paying the same dollar amount of cash flows. Suppose a mortgage obligates the borrower to pay $1000 every 6 months over the next 3 years. What is the current price of the mortgage? This is the loan amount the borrower receives. What is the yield of the mortgage? This is the mortgage interest rate
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