Question: Actuary Major, FM question 4 4. Mr. Bean buys two bonds. One bond is bought to yield 4% effective annually and is a three-year Zero-coupon

Actuary Major, FM question 4

4. Mr. Bean buys two bonds. One bond is bought to yield 4% effective annually and is a three-year Zero-coupon bond that can be redeemed for 1000. The second bond is a 1000 par value 6% semiannual coupon bond that matures in 6 years. If, both bonds have the same price, calculate the effective yield on the coupon bond

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