maturity (years)	1	2	3	4	5
Zero-coupon yields	3.25%	3.5%	3.9%	4.25%	4.40%

NOTE: These are the yields for cash flows to be received at the end of one year, two years, three years, etc.

Consider a five-year, default-free coupon-paying bond with an annual coupon rate of 5% and a face value of $1000. The coupons are paid once a year. Show the timeline. What is the yield to maturity on this bond?

Answer rating: 100% (QA)

Now we can calculate the present value PV of each cash flow and then sum the... View the full answer