The following table summarizes prices of various default$-$free zero$-$coupon bonds $($expressed as a percentage of the face value$)$: ${?}^1.$

Paper size Letter

Print

a$.$ Compute the yield to maturity for each bond.

b$.$ Plot the zero$-$coupon yield curve $($for the first five years$).$

c$.$ Is the yield curve upward sloping, downward sloping, or flat?

a$.$ Compute the yield to maturity for each bond.

The yield on the $1-$year bond is

$\%.($Round to two decimal places.$)$

The yield on the $2-$year bond is

$\%.($Round to two decimal places.$)$

The yield on the $3-$year bond is

$\%.($Round to two decimal places.$)$

The yield on the $4-$year bond is

$\%.($Round to two decimal places.$)$

The yield on the $5-$year bond is

$\%.($Round to two decimal places.$)$

b$.$ Plot the zero$-$coupon yield curve $($for the first five years$).$

The following graph is the zero$-$coupon yield curve: $($Select the best choice below.$)$

OA$.$

B$.$

c$.$ Is the yield curve upward sloping, downward sloping, or flat? $($Select from the drop$-$down menu.$)$

The yield curve is $(1)$

$1$: Data Table

$($Click on the following icon $$ in order to copy its contents into a spreadsheet.$)$

Maturity $($years$)$

Price $($per $$100$ face value$)$

$1$

$2$

$3$

$4$

$5$

$(1)$ upward sloping.

flat.

downward sloping.