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Same face value and maturity

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A. if a zero-coupon bond with a face value of $1,000.00 payable in 1 year sells for $925, what is the interest rate?

B. If another bond with the same face value and maturity sells for $900, what is the interest rate on this bond?

C. Which bond, the one discussed in question a or question b, would you rather invest in?

Reference no: EM132170456

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