I think Hull made a mistake. What he gives is obvious the continuous compounding. Using semi-annual compounding should apply the discount factor 1/(1+r/2)^(2*T). You can test it using semi-annual compounding, the par yield will be 6.75%

You'd better give the page number and chapter number when you ask question next time. You don't want to trouble the person who is willing to answer your question taking a long time to find the question :-).

best,

谢谢答复！用第八版中文版的57页的（4-3）来算，如果将6.89%当做semi-annual compounding，换成是连续复利的话刚好是6.75%。我想是不是表达有问题，英文版（page 81）里作者关于为何按连续复利是6.87%写到"This has semiannual compounding because payments are assumed to be made every 6 months"。是不是作者这的是整个par yeild可以看做是半年付一次息的按一年两次复利得来的，而相应的等价的连续利率为6.75%。您的答复也有道理，我也有觉得这段是弄错的。不知我如上所说的理解对不对呢？您的意思是作者把两者搞反了，按连续利率来算平价收益率为6.87%而用一年两次复利来算得到平价收益率为6.75%？假设这个解释是对的，怎样解释用公式（4-3）算得的等价呢？谢谢!

Well maybe this is another explanation. Since par yield is a kind of return so that it can be quoted either in continuous compounding or semi-annual compounding.

But I don't think this is a good transformation. We know that what compounding method we use does not depend on the frequency we receive the cash flow, but the frequency we reinvest the cash flow. If we use continuous discount factor to calculate the par yield, this already assumes that we are going to reinvest the future coupon continuously.

The numbers are just a coincidence. Anyway, you don't need to focus too much on it. It is just a number or quotation. You know how to get it is enough.

best,

Thanks!