1. Zero-coupon bonds with face value $100, redeemable at par, are priced as follows: bonds redeemable in exactly 1 year are priced at $98, bonds redeemable in exactly 2 years are priced at $93, bonds redeemable in exactly 3 years are priced at $89, bonds redeemable in exactly 4 years are priced at $85.50. Find the yield to maturity of a bond redeemable at 103% of the face value in 4 years with annual coupons of 5%