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The following table summarizes prices (expressed as a percentage of face value) of various default-free semi-annual bonds with coupon rates of 4% Maturity(years) 1 2
The following table summarizes prices (expressed as a percentage of face value) of various default-free semi-annual bonds with coupon rates of 4%
Maturity(years) 1 2 3 4
Price(per $100 face value) 94.52 89.68 85.40 81.65
i. Calculate the annual yield to maturity for each bond.
ii. What can you say about the yield curve for these bonds?
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