At t = 0 (Now), you purchase a zero-coupon bond with the following features: Current price of a…
At t = 0 (Now), you purchase a zero-coupon bond with the following features:
Current price of a bond: $987.65; Face value of bond: $1,500; and maturity of bond: 7 years.
Suppose that, in the 2nd year after you purchased the bond, at time t = 2 years, the continuously compounded market interest rate as applicable to your bond decreased by 75 basis points. a) What is your continuously compounded holding period return, if you hold the bond all the way till its maturity? May 05 2022 06:29 PM
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