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Compute YTM Yields vs Rates Consider the following simple example. Note: upward slopping yield curve. Long rates are higher than short rates: 10- year rate

Compute YTM

 

Yields vs Rates Consider the following simple example. Note: upward slopping yield curve. Long rates are higher than short rates: 10- year rate higher than 5-year higher than 1-year. (more on this later) t r Compute the price of the bond 1 1.00% 5 2.00% Compute the YTM 10 3.00% What would YTM be if all rates were 2%? C 30.00 30.00 100.00

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