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:

Ethical Choice

Decision-making based on moral principles and values, aiming to do what is right and beneficial.

Instrumental Stage

Instrumental stage refers to a phase where actions are performed primarily for the purpose of achieving an external goal or reward, often discussed in the context of moral development.

Moral Development

The process through which individuals develop proper attitudes and behaviors toward other people in society, based on social and cultural norms, rules, and laws.

Avoid Punishment

A behavior modification strategy motivated by the desire to evade consequences or negative outcomes.