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A 20-year zero-coupon bond was recently quoted at 1025 of

Question: A 20-year, zero-coupon bond was recently quoted at 10.25% of par. Find the current yield and the promised yield of this issue, given that the bond has a par value of $1,000. Using semiannual compounding, determine how much an investor would have to pay for this bond if it were priced to yield 10%.

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Accounting Basics: A 20-year zero-coupon bond was recently quoted at 1025 of

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