What are the yields on these three bonds

Reference no: EM13257891

Suppose that one-year zero-coupon US Treasury bonds with a $10,000 face value are currently selling for $9,852.

Similarly zero-coupon Treasuries with two years to maturity are selling for $9,481 and those with five years to maturity are selling for $8,339.

What are the yields on these three bonds?

Following three months of very good economic news, the yields on 1-year, 2-year, and 5-year bonds have risen to 2.7%, 3.8%, and 4.5% respectively. If the Treasury were looking to issue new zero-coupon, $10,000 face value bonds with 1, 2, and 5 year maturities, at what prices would you expect them to sell for?

Reference no: EM13257891

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