# Hull's book par yield example [closed]

In Hull's book (9th edition), on page 83, there is a simple example of par yield:

I am a bit confused when it says "this has semiannual compounding because payments are assumed to be made every 6 months. With continuous compounding, the rate is 6.75% per annum." Isn't the rate of 6.87% already assuming continuous compounding and is obtained by solving the equation here? What does it mean with continuous compounding, the rate is 6.75% per annum? Where is this coming from? And when it says "this has semiannual compounding", what is it referring to?

Compounded, this coupon will yield the following in one year: $$(1+c/2)^2=1+y$$ $$y=(1+c/2)^2-1\approx 6.86\%$$
Alternatively you can quote the same yield on continuous compounding base: $$(1+c/2)^2=e^y$$ $$y=2\ln (1+c/2)\approx 6.64\%$$
$$(1+6.87/200)^2 = e^{0.0675}$$