Question
1). Consider a zero-coupon bond with the following prices and years to maturity. Answer the following based on the information given. Years to maturity Price
1). Consider a zero-coupon bond with the following prices and years to maturity. Answer the following based on the information given.
| Years to maturity | Price (percentage of maturity value) |
| 1 | 97.45% |
| 2 | 94.23 |
| 3 | 90.33 |
| 4 | 86.26 |
- What is the 1 year, 2 year, 3 year, and 4 year interest rate?
- Describe the shape of the yield curve of this bond.
- Is this the shape one typically expects of a yield curve? Why or why not?
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Linear Algebra
Authors: Jim Hefferon
1st Edition
978-0982406212, 0982406215
