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Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) Price of $1000 Par Bond (Zero-Coupon) 1 $943.40 2 $873.52 3

Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) Price of $1000 Par Bond (Zero-Coupon)

1 $943.40

2 $873.52

3 $816.37

a. An 8.5% coupon $1000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be? (For computing yield to maturity, you can use nancial calculator or Excel)

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