Calculate the price and yield to maturity of a 3-year bond with a coupon rate of 4%

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Calculate the price and yield to maturity of a 3-year bond with a coupon rate of 4% making annual coupon payments. Does its yield match that of either the 3-year zero or the 10% coupon bond considered in Example 15.1 ? Why is the yield spread between the 4% bond and the zero smaller than the yield spread between the 10% bond and the zero?

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Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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