Question
Suppose the current, zero-coupon, yield curve for risk-free bonds is as follows: Maturity (years) 1 2 3 4 5 Yield to Maturity 4 . 7
Suppose the current, zero-coupon, yield curve for risk-free bonds is as follows:
Maturity (years) | 1 | 2 | 3 | 4 | 5 |
Yield to Maturity | 4.75% | 5.07% | 5.35% | 5.73% | 6.02% |
a. What is the price per $100 face value of a 3-year, zero-coupon risk-free bond?
b. What is the price per $100 face value of a 5-year, zero-coupon, risk-free bond?
c. What is the risk-free interest rate for a 4-year maturity?
Note: Assume annual compounding.
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An Introduction To Statistical Methods And Data Analysis
Authors: R. Lyman Ott, Micheal T. Longnecker
7th Edition
1305269470, 978-1305465527, 1305465520, 978-1305269477
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