What is the yield to maturity for treasury bonds

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Reference no: EM131998918

Suppose today is January 2,2017, and investors expect the annual risk-free interest rates in 2021 and 2022 to be: 2021 - 4.5% 2022 - 2.3% Currently a four year treasury bond that matures on December 31,2020 has an interest rate equal to 2.5 percent. What is the yield to maturity for treasury bonds that mature at the end of (a) 2021 (a five-year bond) and (b)2022 (a six-year bond) Assume the bonds have no risk.

Reference no: EM131998918

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