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Problem 6 (20 pts), use Excel The current Treasury zero coupon yield curve looks as follows: Maturity (years) Zero-coupon YTM 2 4.30% 4.00% 4.50% 4.70%
Problem 6 (20 pts), use Excel The current Treasury zero coupon yield curve looks as follows: Maturity (years) Zero-coupon YTM 2 4.30% 4.00% 4.50% 4.70% 4.80% What is the price today of a two-year, default-free security with a face value of $1000 and a. an annual coupon rate of 6%? Does this bond trade at a discount, at par, or at a b. What is the price of a five-year, zero-coupon, default-free security with a face value of c. What is the price of a three-year, default-free security with a face value of $1000 and an d. Consider a five-year, default-free bond with annual coupons of 5% and a face value of premium? $1000? annual coupon rate of490? What is the yield to maturity for this bond? S1000. Without doing any calculations, determine whether this bond is trading at a premium or at a discount. Explain
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