You observe the following bond prices: - 1 year zero coupon bond with the real par value of $1000 trading for $1030.93 - 2 year 2% coupon bond with the real par value of $1000 trading for $1082.68 - 3 year 1.5% coupon bond with the real par value of $1000 trading for $1077.15 What is the 3 year zero-coupon yield? Please note we need ZERO COUPON YIELD FROM COUPON PAYING BOND DATA. PLEASE ALSO EXPLAIN RATIONALE.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Ee 176.

You observe the following bond prices: - 1 year zero coupon
bond with the real par value of $1000 trading for $1030.93 - 2
year 2% coupon bond with the real par value of $1000 trading
for $1082.68 - 3 year 1.5% coupon bond with the real par value
of $1000 trading for $1077.15 What is the 3 year zero-coupon
yield? Please note we need ZERO COUPON YIELD FROM
COUPON PAYING BOND DATA. PLEASE ALSO EXPLAIN
RATIONALE.
Transcribed Image Text:You observe the following bond prices: - 1 year zero coupon bond with the real par value of $1000 trading for $1030.93 - 2 year 2% coupon bond with the real par value of $1000 trading for $1082.68 - 3 year 1.5% coupon bond with the real par value of $1000 trading for $1077.15 What is the 3 year zero-coupon yield? Please note we need ZERO COUPON YIELD FROM COUPON PAYING BOND DATA. PLEASE ALSO EXPLAIN RATIONALE.
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