What is the yield to maturity on the bond

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A one-year zero-coupon bond has an interest rate of 4% (spot rate r1); a two-year zero-coupon bond has an interest rate of 8% (spot rate r2).

a) What should a 6% coupon, two-year bond cost? Answer to the nearest penny.

b) What is the yield to maturity on the bond? Answer should be xx.xx%

Reference no: EM132819927

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