Question: Problem 3 : Zero - coupon vs Coupon A zero - coupon bond with maturity 1 year and face value $ 1 , 0 0

Problem 3: Zero-coupon vs Coupon
A zero-coupon bond with maturity 1 year and face value $1,000 currently sells for $952.38. A zero-coupon bond with maturity 2 years and face value $500 currently sells for $436.72.
Estimate the yield to maturity of the 1-year zero-coupon bond.
Estimate the yield to maturity of the 2-year zero-coupon bond.
Using the yields you estimated in (1) and (2), price a 2-year coupon bond with F=$800 and c=8%(paid annually).
Is the yield-to-maturity of the coupon bond above, below or exactly 8%?
Problem 3 : Zero - coupon vs Coupon A zero -

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