Question: The yields to maturity on five zero-coupon bonds are given below: Years to Maturity Yield (%) 1.....................................12.0 2.....................................14.0 3.....................................15.0 4.....................................15.5 5.....................................15.7 (a) What is the

The yields to on five zero-coupon bonds are given below:
Years to Yield (%)
1.....................................12.0
2.....................................14.0
3.....................................15.0
4.....................................15.5
5.....................................15.7
(a) What is the implied forward rate of interest for the third year?
(b) What rate of interest would you receive if you bought a bond at the beginning of the second year and sold it at the beginning of the fourth year?

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