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A zero coupon bond matures in 3 years with a terminal value of $1000. If the current price of the bond is 100.5, what is the 3-year zero rate?

A zero coupon bond matures in 3 years with a terminal value of $1000. If the current

price of the bond is 100.5, what is the 3-year zero rate? Use continuous compounding

and answer to two decimal places.

Top Answer

100.5 = 1000 * e^(-r *3) e^(-r *3) = 100.5/1000 Taking... View the full answer

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