Yield to maturity of a two-year zero-coupon bond

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The table below lists maturities, coupons and prices for three bonds. All bonds have the same default risk and a face value of 100.

Bond

Maturity

Coupon

Price

A

3

6%

94

B

2

5%

98

C

2

3%

94.5

a) What is the yield to maturity of a two-year zero-coupon bond?

b) What is the price of a one-year zero-coupon bond with a face value of 100?

c) What is the implied one-year forward rate for the period between year 2 and year 3?

d) What is the price of a bond similar to Bond C but paying a 6% coupon instead?

Reference no: EM133111525

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