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Problem 15-12 Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years)...

Problem 15-12

Below is a list of prices for zero-coupon bonds of various maturities.

Maturity (Years) Price of $1,000 Par Bond (Zero-Coupon)
1 $ 971.00
2 879.73
3 805.94


a. A 9.6% coupon $1,000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be? (Round your answer to 2 decimal places.)




b. If at the end of the first year the yield curve flattens out at 7.9%, what will be the 1-year holding-period return on the coupon bond? (Round your answer to 2 decimal places.)

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

AS NOTHING WAS MENTIONED, SOLVED WITH EXCEL.

jeff jeffy answered 1 year ago
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