A zero-coupon treasury bond maturing on year 0.5 has a yield to maturity of 5.25% (semi-annual compounding).

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A zero-coupon treasury bond maturing on year 0.5 has a yield to maturity of 5.25% (semi-annual compounding). What is the discount factor for year 0.5? What is the spot rate on year 0.5 based on annual compounding?

What is the spot rate on year 0.5 based on semi-annual compounding?

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Financial Management Core Concepts

ISBN: 978-0132671033

2nd edition

Authors: Raymond M Brooks

Posted Date: May 16, 2023 05:56 AM

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A zero-coupon treasury bond maturing on year 0.5 has a yield to maturity of 5.25% (semi-annual compounding).

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Expert Answer:

To find the discount factor for year 05 we can use the formula Discount Factor 1 1 Spot Raten where ... View the full answer

Financial Management Core Concepts

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