1. Following are the average yield-to-maturities for various A-rated corporate bonds issued by energy companies in the US. You are the CFO of an energy company and want to estimate the yield-to-maturity on a 7 years-to-maturity bond that you are planning to issue to the market for the first time. Given the yield-to-maturities below, compute the estimated yield-to-maturityfor this 7 years-to-maturity bond using the linear-interpolation method.

	5% Coupon	10% Coupon	15% Coupon
Average Yield-to-Maturity of 5 Years to Maturity Bonds	.	9.01%	9.03%
Average Yield-to-Maturity of 8 Years to Maturity Bonds	9.47%	.	9.28%

Hint: This estimation process is called Matrix Pricing. On page 110, the textbook illustrates how to estimate yield-to-maturity using the matrix pricing approach.