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Business, 22.01.2021 20:30 staxeeyy767

Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $94.34, while a 2-year zero sells at $84.99. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 12% per year. According to the expectations hypothesis, what is the expected holding-period return on the coupon bond over the first year (in percentage points, round to the second decimal place)

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Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $94.34, while a 2-yea...
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