(years) Price 1 $97.25 2 $94.53 3 $91.83 4 $89.23 5 $87.53 The above table shows the price per $100 face value of several risk-free, zero- coupon bonds. What is the yield to maturity of the three-year, zero-coupon, risk-free bond shown?

(years) Price 1 $97.25 2 $94.53 3 $91.83 4 $89.23 5 $87.53 The above table shows the price per $100 face value of several risk-free, zero- coupon bonds. What is the yield to maturity of the three-year, zero-coupon, risk-free bond shown?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 5P: Default Risk Premium A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corporate...

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Question

Maturity
(years)
Price
O 1.44%
2.88%
O 0.08%
1
O 5.76%
2
$94.53
3
$91.83
4
$97.25
$89.23
The above table shows the price per $100 face value of several risk-free, zero-
coupon bonds. What is the yield to maturity of the three-year, zero-coupon,
risk-free bond shown?
LO
5
$87.53

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