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The table below shows market prices for three zero coupon bonds with three different terms: one, two, and three years. The bonds all have a

The table below shows market prices for three zero coupon bonds with three different terms: one, two, and three years. The bonds all have a face value of $1,000. Calculate the yields on the zero coupon bonds and graph the yield curve. What is the shape of the yield curve?

Zero Coupon Bond Prices

term years

952.38 1

890.00 2

816.30 3

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