Question: 1. Discount rate = 4.77 2. Governments issue zero coupon bonds which are exactly as they sound: the coupon is $0. Using the discount rate

1. Discount rate = 4.77

2. Governments issue zero coupon bonds which are exactly as they sound: the coupon is $0. Using the discount rate you calculated in Q1, what is the issue price of this zero coupon bond? Like in Q1, this bond is being issued today, 5yr maturity, and $1,000 face value.

Do not convert from discount rate to I/Y (Just use the discount rate)

(All bonds pay 2x a year except the zero coupon bond)

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