Question
The table below provides details on three government bonds (annual coupon payment, par value = $100). Term to maturity (years) Coupon rate (% pa) Yield
The table below provides details on three government bonds (annual coupon payment, par value = $100).
| Term to maturity (years) | Coupon rate (% pa) | Yield to maturity (% pa) |
| 1 | 9.6 | 8.52 |
| 2 | 6.0 | 8.87 |
| 3 | 10.0 | 8.98 |
Another 3-year government bond paying a coupon rate of 1% pa (annual coupon payment, par value = $100). Is the yield of this bond equal to 9%? Why or why not?
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