Question: The yield rate on a one year zero - coupon bond is currently 7 % and the yield rate on a two year zero coupon

The yield rate on a one year zero-coupon bond is currently 7% and the yield rate on a two year zero
coupon bond is currently 8%. The Treasury plans to issue a two year bond with 9% annual coupons,
maturing at $100 par value. Determine the yield-to-maturity of the two year coupon bond.
(A)7.00%
(B)7.52%
(C)7.83%
(D)7.96%
(E)8.00%
 The yield rate on a one year zero-coupon bond is currently

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