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PLEASE BREAK DOWN ALL WORK!! A 10-year 8% coupon Treasury bond currently sells for $90. A 10-year 4% coupon- Treasury bond currently sells for $80.

PLEASE BREAK DOWN ALL WORK!!

A 10-year 8% coupon Treasury bond currently sells for $90. A 10-year 4% coupon- Treasury bond currently sells for $80. What is the 10-year zero rate? (Hint: Consider taking a long position in two of the 4% coupon bonds and a short position in one of the 8% coupon bonds.)

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