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Calculating the Yield of a Zero Coupon Bond

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in this video we're going to talk about

how to calculate the yield of maturity

on a zero coupon bond so the yield of

maturity is the rate of return that you

would get if you purchased a bond at its

current price and then held the bond to

maturity so for example and now we're

course talking about zero coupon bonds

in this example let's say that you

bought a bond for ninety five thousand

two hundred and thirty-eight dollars in

the face value of the bond was a hundred

thousand so because it's a zero coupon

bond that we're talking about there's

not going to be any periodic interest

payments or anything like that it's just

a simple 1-year bond where you say okay

today I pay ninety five thousand two

thirty-eight in a year from now I get a

hundred thousand returned to me so that

difference between the hundred thousand


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