Calculate the yields to maturity for the five bonds

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Reference no: EM13826638

Problem:

Suppose the prices of zero-coupon bonds are as given in the table below, and each bond has a face value of $1,000.

Bond	Price	Maturity (years)
A	$955.94	1
B	$870.22	2
C	$790.50	3
D	$715.28	4
E	$644.14	5

a. Calculate the yields to maturity for the five bonds.

b. Compute the forward rate for each year.

c. How would you construct a one-year forward loan beginning in year 2?

Reference no: EM13826638

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