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What rate of return did you earn holding the asset for year

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A zero-coupon bond has a face value of $120 and matures in 2 years. The rate of return on equally risky assets if 5% (0.05). What will its price be today? Suppose you sell it next year when the rate of return on equally risky assets is 7% (0.07). What rate of return did you earn holding the asset for a year?

Reference no: EM133083673

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