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7. The following is a list of prices for zero-coupon bonds of various maturities. Maturity (years) Price of Bond 1 $943.40 2 898.47 3
7. The following is a list of prices for zero-coupon bonds of various maturities. Maturity (years) Price of Bond 1 $943.40 2 898.47 3 847.62 4 792.16 a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year.
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