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Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $88.64, while a 2-year zero sells at $78.45. You are considering the

Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $88.64, while a 2-year zero sells at $78.45. You are considering the purchase of a 2-year-maturity bond makingannualcoupon payments. The face value of the bond is $100, and the coupon rate is 6% per year.

a.What is the yield to maturity of the 2-year zero?

b. What is the YTM of the 2-year coupon bond?

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