Consider this:
Zero coupon money multiplier notes of 2008.
Bonds were issued on July 1,1990 for $100. Interest is paid every July 1 and the bond matures on July 1, 2008. Determine 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. Explain why the returns calculated in (a) and (b) are different.