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The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of the face value: Maturity (years) 1 2 3 4 5

The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of the face value:

Maturity (years) 1 2 3 4 5 Price (per $100 face value) 95.98 91.67 87.03 82.32 77.18

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?

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