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The yield to maturity on a 1 year zero coupon bond is 3% and on a 2 year zero coupon bond is 3.5%. Assume face
The yield to maturity on a 1 year zero coupon bond is 3% and on a 2 year zero coupon bond is 3.5%. Assume face value of 1000$ and annual compounding. Show that your 1 year holding period return is same from
both the bonds. Hint: you will need to find r2.
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