Question: The table below shows market prices for four zero coupon bonds with four different terms: one, two, three and four years. The bonds all have

The table below shows market prices for four zero coupon bonds with four different terms: one, two, three and four years. The bonds all have a face value of

$1,000. Calculate the yields on the zero coupon bonds and graph the yield curve. What is the shape of the yield curve?

Zero Coupon Bond Prices Term (years) Price ($) 1 892.86 2 797.19 3 711.78 4 635.52

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