A zero-coupon bond with a five-year maturity is worth 68.06% of its final reimbursement value.
a. Verify that its actuarial yield-to-maturity is equal to 8% by compounding 8% over five years.
b. What is the simple yield of this bond, and why is it so different from the actuarial yield?

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The Answer of A zero-coupon bond with a five-year maturity is worth 68.06% of its final reimbursement value.
a. Verify that its actuarial yield-to-maturity is equal to 8% by compounding 8% over five years.
b. What is the simple yield of this bond, and why is it so different from the actuarial yield?

A Zero-Coupon Bond with a Five-Year Maturity Is Worth 68