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The following table gives yields and durations for three 15-year bonds. The three coupon rates are 0%, 3.5%, and 7%. Which coupon rate belongs to
The following table gives yields and durations for three 15-year bonds. The three coupon rates are 0%, 3.5%, and 7%. Which coupon rate belongs to which bond? What is the shape of the term structure of spot rates underlying the valuation of these bonds?
Bond #1 -- Yield: 3.50% -- Duration -- 11.59
Bond #2 -- Yield: 3.50% -- Duration -- 14.75
Bond #3 -- Yield: 3.50% -- Duration 10.26
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