Assuming Annual Compounding and Annual Coupon Payments,the Prices of a One-Year

question 9

Multiple Choice

Assuming annual compounding and annual coupon payments,the prices of a one-year 4% coupon bond and a two-year 5% coupon bond are $101 and $99,respectively.The zero-coupon rate for two years is:

• A)4.5%
• B)5.1%
• C)5.6%
• D)6.2%

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A theory of ethics which requires that individuals examine all the potential actions in each situation and choose the action that yields the greatest amount of pleasure over pain for all involved.