Susan can buy a zero-coupon bond that will pay 1,000 at the end of 12 years and is currently selling for 624.60. Instead, she purchases a bond with 6% semi-annual coupons that will pay 1,000 at the end of 10 years. If she pays X for this bond she will earn the same annual effective interest rate as the zero-coupon bond. 

Calculate X.

Answer rating: 100% (QA)

To calculate X we need to find the annual effective interest rate AEIR of the zerocoupon bond and th... View the full answer