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Posted on Aug 23, 2024

Suppose that zero interest rates with continuous compounding are as follows: Maturity Rate 0.5 Years 0.5 7.5 1 Years 1.0 7.9 1.5 Years 1.5 8.2

Suppose that zero interest rates with continuous compounding are as follows:

 Maturity Rate 0.5 Years 0.5 7.5 1 Years 1.0 7.9 1.5 Years 1.5 8.2 2 Years 2.0 8.4

A two-year bond pays an 10% coupon per annum paid semiannually.

a- Calculate the price of the bond ?

b- Calculate the yield of the bond(%) ?

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