Question: Zero - Coupon Yields: Year 1 = 3 . 2 5 % Year 2 = 3 . 5 0 % Year 3 = 3 .

Zero-Coupon Yields: Year 1=3.25% Year 2=3.50% Year 3=3.90% Year 4=4.25% Year 5=4.40%
NOTE: These are the yields for cash flows to be received at the end of one year, two years, three years, etc.
Consider a five-year, default-free coupon-paying bond with an annual coupon rate of 5% and a face value of $1000. The coupons are paid once a year.
A. Show the timeline.
B. What is the yield to maturity on this bond?

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