Yields on lottery bonds

Lottery bonds are bonds which are redeemed by lottery drawings. The yield realized by an investor holding only part of an issue of lottery bonds is, therefore, a random variable. This paper shows that the internal rate of return on an investment in lottery bonds as well as the periodic yields realized during the different interest periods are asymptotically normally distributed. The results are used to determine the number of bonds to be purchased to ensure a realized yield close to the expected yield rate.