1) Suppose you have the choice of investing in (A) a zero-coupon bond, which costs...
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Accounting
1) Suppose you have the choice of investing in (A) a zero-coupon bond, which costs $500 today, pays no coupon during its life, compounds semi-annually, and then pays $1,000 after 10 years, or (B) a bond which costs $750 today, pays $25 in interest semiannually, and matures at the end of 10 years. What are the Semi-Annual yields to maturity of the two bonds? (A) _____________________________
(B) _____________________________
Which is best? C)_______________________
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