Question: Consider the Allied Signal Corporation zero coupon money multiplier notes of 2008. The bonds were issued on July 1, 1990, for USD 100. Interest is paid every July one & the bond matures on July 1, 2008. Calculate the yield to maturity if the bonds are purchased at the:
[A] Issue price in 1990
[B] Market price as of July 1, 2004, of $750
[C] Describe why the returns calculated in [A] & [B] are different.