Question: Using the following term structure, answer the following questions term structure of the interest rate maturity ( year) Yield to maturity 1 4% 2 5%

Using the following term structure, answer the following questions

term structure of the interest rate
maturity ( year) Yield to maturity
1 4%
2 5%
3 6%
4 7%
5 8%

Calculate the price and Yield-to-Maturity (YTM) of a 4-year 8% coupon bond with a face value of $1,000

Calculate the 1-year short rate between years 1 and 2, and between years 3 and 4.

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