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Maturity ( years ) 1 2 3 4 5 Price ( per $ 1 0 0 face value ) 9 5 . 4 2 9
Maturity years
Price per $ face value
a Compute the yield to maturity for each bond.
b Plot thezerocoupon yield curvefor the first fiveyears
c Is the yield curve upwardsloping downwardsloping orflat
Note:
Assume annual compounding.
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