What is the ytm of bond

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Bond A is a one-year zero-coupon bond with $1,000 face value and a market price of $925.  Bond B is a two-year zero-coupon bond with $1,000 face value and a market price of $895.  Bond C is a two-year bond that trades in the same market as Bonds A and B, has the same risks as these bonds and has a $1,000 face value, and an annual coupon payment of 5%.  You will learn more about coupon bonds in the future.  For now, the following table describes the size and timing of the cash flows for Bond C. 

Time (yrs)

0

1

2

Coupon payments

 

$50

$50

Face Value

 

 

$1000

What is the YTM of each bond?

Reference no: EM133114873

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