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Zero-coupon treasury (STRIP) Yield to Maturity 1 YEAR 4% 2 YEAR 5% 3 YEAR 7% 4 YEAR 9% Given the information in this table, calculate

Zero-coupon treasury (STRIP)

Yield to Maturity

1 YEAR

4%

2 YEAR

5%

3 YEAR

7%

4 YEAR

9%

Given the information in this table, calculate your profit or loss if you bought a 4-year bond today and sold it in 2 years. Assume the par value of the bond is $1,000."

Gain of $180.00

Gain of $50.50

Gain of $72.64

Loss of $40.25 loss

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