Suppose the Greek Government announces that it will issue a two-year zero-coupon bond, with an interest rate of 6%. How much will an investor pay today to buy a bond with a face value of 1000 euros and how much will he receive after two years net after tax if it is known that these bonds are taxed at a rate of 10%? 

Calculate What will be the beneficiary's after-tax annual return?

Answer rating: 100% (QA)

The price an investor pays for a bond today is its present value which is the discounted value of it... View the full answer