Question: Suppose that a 1 - year zero - coupon bond with face value 1 0 0 currently sells at 9 4 . 3 4 ,

Suppose that a 1-year zero-coupon bond with face value 100 currently sells at 94.34, while a 2-year zero sells at 84.99. You are considering the purchase of 2-year bond making annual coupon payments. The face value of the bond is 100 and the coupon rate is 12% per year.
a) What are the yields of the two zeros, and what is the price of the 2-year coupon bond?

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