What is the market interest rate

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Let's consider two different bonds in two different economic situations. First, if a $1,000 face value bond is a one-year zero coupon bond and it sells at $917.43, then what is the market interest rate? And there is another $1,000 face value bond. It has coupon rate of 10%, with interest paid semi-annually, and matures in a year. Two interest payments will be paid every end of half-year. It also sells at $917.43. What is the market interest rate? Which economy has a higher market interest rate? Note. You may use the quadratic formula:

Reference no: EM133125569

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