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The prices of discount bonds (all with maturity value of $1,000) maturing in years 1, 2, 3, 4, 5 are given below. Price Time to
The prices of discount bonds (all with maturity value of $1,000) maturing in years 1, 2, 3, 4, 5 are given below.
Price | Time to Maturity |
920 | 1 |
860 | 2 |
790 | 3 |
700 | 4 |
600 | 5 |
What is the yield to maturity on a risk-free 5% bond due in 5 years (also with maturity value of $1,000)?
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