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YIELD CURVE FOR ZERO COUPON BONDS RATED AA Assume

Question 44

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YIELD CURVE FOR ZERO COUPON BONDS RATED AA YIELD CURVE FOR ZERO COUPON BONDS RATED AA Assume that there are no liquidity premiums. You just bought a 15-year maturity Xerox corporate bond rated AA with a 0 percent coupon. You expect to sell the bond in eight years. Find the expected interest rate at the time of sale (watch out for rounding error) . A) 8.85 percent B) 11.00 percent C) 12.80 percent D) 13.92 percent E) 12.49 percent Assume that there are no liquidity premiums. You just bought a 15-year maturity Xerox corporate bond rated AA with a 0 percent coupon. You expect to sell the bond in eight years. Find the expected interest rate at the time of sale (watch out for rounding error) .


A) 8.85 percent
B) 11.00 percent
C) 12.80 percent
D) 13.92 percent
E) 12.49 percent

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