Ruth Lewis is planning to buy 10-year zero coupon bonds issued by the U.S. Treasury. If...
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Ruth Lewis is planning to buy 10-year zero coupon bonds issued by the U.S. Treasury. If these bonds have a face value of $1,000 and are currently selling at $410.45, what is the effective annual yield? Assume that interest compounds semiannually on similar coupon paying bonds. (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.) Effective Annual Yield % Ruth Lewis is planning to buy 10-year zero coupon bonds issued by the U.S. Treasury. If these bonds have a face value of $1,000 and are currently selling at $410.45, what is the effective annual yield? Assume that interest compounds semiannually on similar coupon paying bonds. (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.) Effective Annual Yield %
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Answer rating: 100% (QA)
1 Effective Annual Yield for 10year zero coupon bonds The formula to calculate the effective annual yield is as follows Effective Annual Yield 1 Semiannual Yield2 1 Given that the bonds have a face va... View the full answer
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
Posted Date:
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