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University
| Teaching Since: | Apr 2017 |
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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
The following table summarizes prices of various default-free zero-coupon bonds
(expressed as a percentage of face value):
Â
|
Maturity (years) |
 1 |
 2 3 4 |
 5 |
|
Price (per $100 face value) |
$95.51 |
$91.05 $86.38 $81.65 |
$76.51 |
Â
a. Compute the yield to maturity for each bond.
b. Plot the zero-coupon yield curve (for the first five years).
c. Is the yield curve upward sloping, downward sloping, or flat?
Mat-----------uri-----------ty -----------(ye-----------ars-----------) 1----------- 2 -----------3 4----------- 5 -----------Pri-----------ce -----------(pe-----------r $-----------100----------- fa-----------ce -----------val-----------ue)----------- $9-----------5.5-----------1 $-----------91.-----------05 -----------$86-----------.38----------- $8-----------1.6-----------5 $-----------76.-----------51 -----------Yie-----------ld -----------to -----------Mat-----------uri-----------ty -----------(YT-----------M) -----------4.7-----------0% -----------4.8-----------0% -----------5-----------