Question
a)Find the prices of the one and two-year zero-coupon bonds (per $100 of face value) implicit in the prices of these coupon bonds b)compute the
a)Find the prices of the one and two-year zero-coupon bonds (per $100 of face value) implicit in the prices of these coupon bonds
b)compute the yields to maturity on the one and two-year zero coupon bonds (this is the zero-coupon yield curve).
Consider the below two bonds:
| Bond | Price | Cash | Flows |
| Year 1 | Year 2 | ||
| A | $1059.19 | 100 | 1100 |
| B | 1041.02 | 90 | 1090 |
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
