Rank the following three debt securities in terms of lowest EFFECTIVE annual interest rate to largest (Hint: Chapter 14 on “Yield to Maturity”; Slides 14 of Chapter 14)
A one year zero paying 8%
A one year corporate bond selling for par paying semi-annual payments with a (annual) coupon rate of 8%
A three month treasury bill selling at $98,100 with a par value of Y$100,000.