The following table summarizes the prices of various no-default zero-coupon bonds ($100 face value): maturity (year) 1
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The following table summarizes the prices of various no-default zero-coupon bonds ($100 face value):
maturity (year) | 1 | 2 | 3 | 4 | 5 |
Price (per $100 face value) | 95,49$ | 91,07 $ | 86,48 $ | 81,81 $ | 76,77 $ |
A. Calculate the yield-to-maturity for each bond.
B. Plot the zero coupon yield curve (for the first five years).
C. Is the yield curve upward sloping, downward sloping or flat?
Not :
Assume annual compounding.
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