Debt securities in terms of lowest effective annual interest

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Rank the following three debt securities in terms of lowest EFFECTIVE annual interest rate to largest (Hint: Chapter 14 on “Yield to Maturity”; Slides 14 of Chapter 14)

A one year zero paying 8%

A one year corporate bond selling for par paying semi-annual payments with a (annual) coupon rate of 8%

A three month treasury bill selling at $98,100 with a par value of Y$100,000.

Reference no: EM131332922

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