The prices of three zero - coupon bonds are provided in the table below. All three bonds have a face value of $ 1 ,

Question

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The prices of three zero$-$coupon bonds are provided in the table below. All three bonds have a face value of $$1,000.$ The three bonds have three different terms to maturity. What is the yield on the bond with $2$ years to maturity?

Maturity

Price

Yield

$1$ Year

$$970\mathrm{.}35$

K$1$

$2$ Years

$$925\mathrm{.}25$

K$2$

$3$ Years

$$880\mathrm{.}55$

K$3$

Group of answer choices

$4\mathrm{.}02\%$

$3\mathrm{.}96\%$

$4\mathrm{.}01\%$

$4\mathrm{.}07\%$