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The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of the face value): LOADING.... a. Compute the yield to maturity
The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of the face value): LOADING.... 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?
Maturity (years) | 1 | 2 | 3 | 4 | 5 |
Price (per $100 face value) | $95.83 | $91.40 | $86.76 | $81.90 | $76.85 |
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