You have just bought a ve-year zero-coupon treasury bond for $950 per $1000 face value.
(a) what is the annually compounded yield to maturity on the bond?
(b) suppose the yield to maturity on comparable zeros increases to 2% immediately after purchasing the bond and remains there. calculate the annual holding period return if you sell the bond after one year.
(c) what is the annually compounded yield to maturity on the bond one year after the original purchase?
(d) suppose after one year you instead hold the bond to maturity. what is the annualized holding period return for the ve year investment?

1. descriptive statistics quickly describe large amounts of data can predict future stock returns with surprising accuracy statisticians understand non-numeric information, like colors refer mainly to patterns that can be found in data 2. a 15% return on a stock means that 15% of the original purchase price of the stock returns to the seller at the end of the year 15% of the people who purchased the stock will see a return the stock is worth 15% more at the end of the year than at the beginning the stock has lost 15% of its value since it was originally sold 3. a stock purchased on january 1 cost $4.35 per share. the same stock, sold on december 31 of the same year, brought in $4.75 per share. what was the approximate return on this stock? 0.09% 109% 1.09% 9% 4. a stock sells for $6.99 on december 31, providing the seller with a 6% annual return. what was the price of the stock at the beginning of the year? $6.59 $1.16 $7.42 $5.84