Calculate the yield using geometric average

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Interest rates on 4-year Treasury securities are currently 5.1%, while 6-year Treasury securities yield 7.8%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places.

A bond has a $1,000 par value, 15 years to maturity, and a 8% annual coupon and sells for $1,080.

A) What is its yield to maturity (YTM)? Round your answer to two decimal places.

B) Assume that the yield to maturity remains constant for the next 4 years. What will the price be 4 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.

Reference no: EM131990332

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