The six-month zero rate is 8% per annum with semiannual compounding. The price of a one-year bond that provides a coupon of 6% per annum semiannually is 97. What is the one-year continuously compounded zero rate? O 9.02% O8.02% O 8.52% O 9.52%

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 15PROB
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The six-month zero rate is 8% per annum with semiannual compounding. The price of a one-year
bond that provides a coupon of 6% per annum semiannually is 97. What is the one-year
continuously compounded zero rate?
O 9,02 %
O8.02 %
O8.52 %
O 9.52%
Transcribed Image Text:The six-month zero rate is 8% per annum with semiannual compounding. The price of a one-year bond that provides a coupon of 6% per annum semiannually is 97. What is the one-year continuously compounded zero rate? O 9,02 % O8.02 % O8.52 % O 9.52%
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