Question
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
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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Finance A Quantitative Introduction Volume 1
Authors: Piotr Staszkiewicz, Lucia Staszkiewicz
1st Edition
0128015845, 978-0128015841
