Question: Problem 3 [30). A bond with a face value of $100 has time to maturity 3 years. The current time t price of the bond
Problem 3 [30). A bond with a face value of $100 has time to maturity 3 years. The current time t price of the bond is $91.55. The same bond is expected to cost $92.46 next year, and $95.24 in two years. (A) (3) Find the yield to maturity i an investor buys the bond at time t. (B) [8] Find the expected yields to maturity if an investor buys the bond at time t + 1 and if at time : + 2. (C) [12] Find the current one-period interest rate and expected interest rates in period 1 + 1 and 7+2. (D) [7] Plot the yield curve. Problem 3 [30). A bond with a face value of $100 has time to maturity 3 years. The current time t price of the bond is $91.55. The same bond is expected to cost $92.46 next year, and $95.24 in two years. (A) (3) Find the yield to maturity i an investor buys the bond at time t. (B) [8] Find the expected yields to maturity if an investor buys the bond at time t + 1 and if at time : + 2. (C) [12] Find the current one-period interest rate and expected interest rates in period 1 + 1 and 7+2. (D) [7] Plot the yield curve
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