Bluedragon, “An investor deposited $54,000 in a zero coupon bond position 10 years ago. It consisted of 100 zero coupon bonds each with a face value of $1,000 and 10 years to maturity.” So if the investor does not have to pay tax, in 10 years, he should be able to get the full face value ($100,000) of the bond, which he bought at a discount $54,000.
When do you use (y/x)^(1/10) - 1 vs. [(y/x)^(1/20) -1] *2 ? Thanks.
annual v. semiannual
Well, yes. Is it wrong to assume semi-annual when dealing with bonds and it is not stated otherwise?