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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. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (Years) Price of Bond YTM $ 920.90 % 2 $ 912.97 % 3 $ 826.62 % $ 785.62 b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (years) 1 2 3 4 Price of Bond $ 920.90 912.97 826.62 785.62 Maturity (Years) Price of Bond Forward Rate 2 $ 912.97 % 3 $ 826.62 % 4 $ 785.62 %
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