Consider a 2-year treasury note with annual coupon rate 4


1. Consider a 2-year Treasury note with annual coupon rate 4% and the coupons are paid semiannually. The continuously compounded bond yield is 2% per year. What is the bond price?

98.00 99.92 103.84 103.88 111.68

2. The price of a 2-year zero-coupon bond with face value $100 is $95. What is the continuous compounding 2-year zero rate per year?

2.50%

2.56%

5.00%

5.13%

10.00%

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Financial Management: Consider a 2-year treasury note with annual coupon rate 4
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