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Consider the following US treasury rate table expressed in percentage. Maturity t Yield R(0,t) Yesterday Last Week Last Month 6 Month 2.65 2.35 1.85 1.55

Consider the following US treasury rate table expressed in percentage.

Maturity

t

Yield

R(0,t)

Yesterday Last Week Last Month
6 Month 2.65 2.35 1.85 1.55
1 Year 2.75 2.70 2.20 1.90
2 Year 3.00 2.90 2.40 2.10
3 Year 4.75 4.65 4.15 3.85
5 Year 4.80 4.70 2.20 3.90
10 Year 5.00 4.90 4.40 4.10
30 Year 5.50 5.30 4.80 4.50

What is today the yield to maturity of a 3 year 5% coupon bond with annual payments? (Hint: Use the General Formula to find the price first, then compute the yield to maturity).

Select one Answer:

A

3.76

B

4.06

C

3.85

D

4.56

E

4.15

F

4.75

G

4.66

H

4.65

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