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For this question, assume annual compounding. The following is a list of prices for zero coupon bonds with different maturities and par value of $1,000.
For this question, assume annual compounding. The following is a list of prices for zero coupon bonds with different maturities and par value of $1,000. Maturity (Years) Price 1 $943.40 2 $881.68 3 $808.88 4 $742.09 a) What are the 4 spot rates or zero yields? b) What is the price of a $1000-par, 4-year maturity bond with a 12% coupon rate paid annually? c) What is the yield to maturity (YTM) of this bond? d) What is the price of the bond in the previous problem expected to be a year from today? (Hint: An investor must earn the one-year rate during the first year). I need answers c and D
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