Part b only

3. Term structure of zero-coupon bond is as follows: (8 points: 4 points each) 1 2 3 Maturity Years Zero-Coupon YTM 3.25% 3.5% 3.9% 4.25% (A) Compute the price today of a coupon bond with a face value of $1000 and an annual coupon rate of 4%. 4yr:4.25% coupon:4% CA=1000*4%=40 P=[(1-((1+4.25%)^4)/0,0425)*40+(1/(1+4.25%)^4)*1000 =676.14 (B) Compute the yield rate of the coupon bond in part (A)