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LO1 13. Calculating Returns You purchased a zero-coupon bond one year ago for $267.35. The market interest rate is now 5.3 pe

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Answer #1
                  K = Nx2
Bond Price =∑ [(Semi Annual Coupon)/(1 + YTM/2)^k]     +   Par value/(1 + YTM/2)^Nx2
                   k=1
                  K =24x2
Bond Price =∑ [(0*1000/200)/(1 + 5.3/200)^k]     +   1000/(1 + 5.3/200)^24x2
                   k=1
Bond Price = 284.95
rate of return/HPR = ((Ending price+Coupon amount)/Beginning price-1)
=((284.95+0)/267.35-1)
=6.58%
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