Summarizes prices of various default-free-zero-coupon bonds

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The following table summarizes prices of various default-free, zero-coupon bonds (expressed as a percentage of face value):

Maturity (years) 1 2 3 4 5

Price (per $100 face value) $95.51 $91.05 $86.38 $81.65 $76.51

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.

Reference no: EM132052745

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