I have this financial maths problem I cannot solve.
Supposing we have a bond, with a par value of $100, a coupon rate of 5.75% and it is selling for, 104.75. We solve for the yield to maturity using excel.
The price of the bond was calculated using the settlement date of the 15th of September, 2009. It pays coupons on Jan 15 and July 15. It matures on January 15, 2010!
If i want to work out the interest rate of a zero coupon bond, which is the equivalent, how do I do this?
And also, if there is a second bond, that matures a year later, Jan 2011 how do i find the zero coupon interest rate for that.