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The following is a list of prices for zero-coupon bonds of various maturities. a. Calculate the yield to maturity for a bond with a maturity
The following is a list of prices for zero-coupon bonds of various maturities.
a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years.
b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year.
Maturity (years) | Price of Bond |
1 | $943.40 |
2 | 898.47 |
3 | 847.62 |
4 | 792.16 |
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