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The following table summarizes prices of various default-free zero-coupon bonds ($100 face value): Maturity (years) 1 2 3 4 5 Price (per $100 face value)

The following table summarizes prices of various default-free zero-coupon bonds ($100 face value):

Maturity (years)

1

2

3

4

5

Price (per $100 face value)

$95.56

$91.05

$86.46

$81.68

$76.57

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?

Note: Assume annual compounding.

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