The Six-Month Zero Rate Is 8% Per Annum with Semiannual

question 5

Multiple Choice

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?

• A) 8.02%
• B) 8.52%
• C) 9.02%
• D) 9.52%

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Definitions:

Exclusive Provider Organization

A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan's network, except in an emergency.

Health Maintenance Organization

A type of health insurance plan that often requires members to access healthcare services from a specific network of providers.

Allotted Time Period

The specific duration that is assigned or permitted for a particular task, event, or activity.

Modified Wave

A change or adaptation in a wave pattern, often referring to scheduled appointments or signals, to achieve a desired outcome or behavior.