Donna Clark is planning to buy 10-year zero-coupon bonds issued by the U.S. Treasury. If these bonds have a face value of $1000 and are currently selling for $404.63, what is the effective annual yield? Assume that interest compounds semiannually on similar coupon-pay bonds.

Answer rating: 100% (QA)

Step 1 Zerocoupon bonds are the bonds which are issued at discount and redeemable at par Th... View the full answer