Use the same yield curve in 2). Consider two bonds, both with 7 years to maturity, but with different coupon rates. Let the two coupon rates be 15% and 3%. semiannually

a) Compute the prices and the yields to maturity of these coupon bonds. b) How do the yields to maturity compare to each other? If they are different, why are they different? Would the difference in yields imply that one is a better buy than the other?

Yield Curve MaturityYieldMaturity Yield Maturity Yield 0.25 6.33% 275 6.86% 525 6.39% 0.50 6.49% 3.00 6.83% 5.50 6.31% 0.75 6.62% 3.25 6.80% 5.75 6.24% 1.00 6.71% 3.50 6.76% 6.00 6.15% 1.25 6.79% 3.75 6.72% 6.25 6.05% 1.50 6.84% 4.00 6.67% 6.50 5.94% 1.75 6.87% 4.25 6.62% 6.75 5.81% 2.00 6.88% 4.50 6.57% 7.00 5.67% 225 6.89% 475 6.51% 725 5.50% 2.50 6.88% 5.00 6.45% 7.50 5.31% Yield Curve MaturityYieldMaturity Yield Maturity Yield 0.25 6.33% 275 6.86% 525 6.39% 0.50 6.49% 3.00 6.83% 5.50 6.31% 0.75 6.62% 3.25 6.80% 5.75 6.24% 1.00 6.71% 3.50 6.76% 6.00 6.15% 1.25 6.79% 3.75 6.72% 6.25 6.05% 1.50 6.84% 4.00 6.67% 6.50 5.94% 1.75 6.87% 4.25 6.62% 6.75 5.81% 2.00 6.88% 4.50 6.57% 7.00 5.67% 225 6.89% 475 6.51% 725 5.50% 2.50 6.88% 5.00 6.45% 7.50 5.31%