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Calculate the yield-to-maturity of a zero coupon bond that is trading at $994.00, matures in exactly...

Calculate the yield-to-maturity of a zero coupon bond that is trading at $994.00, matures in exactly 2 months and has a face value of $1,000.

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Answer #1

We can use the formula of current price of bond which is equivalent to finding present value of future cash flows of bond like coupon rate and face value discounted at return called yield of maturity.

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