Question 2 You are given the following information on three bonds making annual coupon payments: Bond A Bond B Bond C 1,000 6.60% Face value Coupon rate Maturity (years) Yield to maturity 1,000 0.00% 1 4.10% 1,000 5.60% 2 5.15% 3 6.05% a) What are the prices of the three bonds? Bond A price ($) Bond B price ($) Bond C price ($) C ) $0.00 $0.00 $0.00 Sorry, try again Sorry, try again Sorry, try again b) Based on the information provided, what is the implied yield to maturity for a 1-year zero-coupon bond? YTM of 1-year zero-coupon bond (%) 0.00% Sorry, try again c) What is the implied yield to maturity for a 2-year zero-coupon bond? Hint: First, solve for the PV of Bond B's final cash flow using Bond B's price and the yield for 1-year zero-coupon bonds. YTM of 2-year zero-coupon bond (%) 0.00% Sorry, try again d) What is the implied yield to maturity for a 3-year zero-coupon bond? Hint: First, solve for the PV of Bond C's final cash flow using Bond C's price and the yields for 1-year and 2-year zero coupon bonds. YTM of 3-year zero-coupon bond (%) 0.00% Sorry, try again Question 2 You are given the following information on three bonds making annual coupon payments: Bond A Bond B Bond C 1,000 6.60% Face value Coupon rate Maturity (years) Yield to maturity 1,000 0.00% 1 4.10% 1,000 5.60% 2 5.15% 3 6.05% a) What are the prices of the three bonds? Bond A price ($) Bond B price ($) Bond C price ($) C ) $0.00 $0.00 $0.00 Sorry, try again Sorry, try again Sorry, try again b) Based on the information provided, what is the implied yield to maturity for a 1-year zero-coupon bond? YTM of 1-year zero-coupon bond (%) 0.00% Sorry, try again c) What is the implied yield to maturity for a 2-year zero-coupon bond? Hint: First, solve for the PV of Bond B's final cash flow using Bond B's price and the yield for 1-year zero-coupon bonds. YTM of 2-year zero-coupon bond (%) 0.00% Sorry, try again d) What is the implied yield to maturity for a 3-year zero-coupon bond? Hint: First, solve for the PV of Bond C's final cash flow using Bond C's price and the yields for 1-year and 2-year zero coupon bonds. YTM of 3-year zero-coupon bond (%) 0.00% Sorry, try again