What is the eighteen-month zero rate

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The six-month and one-year zero rates are 9% and 10% per annum. For a bond that has a life of 18 months and pays a coupon of 7% per annum (with semiannual payments and one having just been made), the yield is 10.5% per annum. All rates are quoted with semiannual compounding.

problem a) What is the bond's price?

problem b) What is the 18-month zero rate?

Reference no: EM132819949

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