QUESTION 10 You are given the following information about zero-coupon bonds with different maturities. All of these bonds have $1,000 face value: a) Calculate the yield to maturity for each bond. Plan A: Plan B: Plan C: b) You own a fourth bond, trading in the same market and with identical credit risk as the zero-coupon bonds presented in part a). This bond has cash flows of $1,000 in 6 months, $1,000 in 1 year and $1,000 in 18 months. In equilibrium, what should the price of this bond be? c) What is the yield-to-maturity of the bond in part b? d) Briefly discuss the reasons for differences between this yield-to-maturity, and the yield-to-maturity of the other eighteen-month bond as you calculated it in part a. QUESTION 10 You are given the following information about zero-coupon bonds with different maturities. All of these bonds have $1,000 face value: a) Calculate the yield to maturity for each bond. Plan A: Plan B: Plan C: b) You own a fourth bond, trading in the same market and with identical credit risk as the zero-coupon bonds presented in part a). This bond has cash flows of $1,000 in 6 months, $1,000 in 1 year and $1,000 in 18 months. In equilibrium, what should the price of this bond be? c) What is the yield-to-maturity of the bond in part b? d) Briefly discuss the reasons for differences between this yield-to-maturity, and the yield-to-maturity of the other eighteen-month bond as you calculated it in part a