What is the bond market price and zero rate

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Reference no: EM131500504

The six-month zero rate is 10% per annum. A bond is issued today that has a life of 12 months, a face value of $100, and pays a coupon of 5% per annum (with semiannual payments). The yield on the bond is 7% per annum. Assume all rates are continuously compounded.

What is the bond’s market price? What is the 12-month zero rate?

Reference no: EM131500504

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