The yields to maturity on five zero-coupon bonds are given below: Years to Maturity Yield (%) 1.....................................12.0

Question:

The yields to on five zero-coupon bonds are given below:
Years to Yield (%)
1.....................................12.0
2.....................................14.0
3.....................................15.0
4.....................................15.5
5.....................................15.7
(a) What is the implied forward rate of interest for the third year?
(b) What rate of interest would you receive if you bought a bond at the beginning of the second year and sold it at the beginning of the fourth year?
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...