Assume the​ zero-coupon yields on​ default-free securities are as summarized in the following​ table:   Maturity 1 year 2 years 3 years 4 years 5 years ​Zero-Coupon Yields 7.00​% 7.60​% 7.90​% 8.30​% 8.70​%   What is the maturity of a​ default-free security with annual coupon payments and a yield to maturity of 7.00%​? ​Why? What is the maturity of a​ default-free security with annual coupon payments and a yield to maturity of 7.00%​?   A. One year   B. Two years   C. Three years   D. Four years   E. Five years

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
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Assume the​ zero-coupon yields on​ default-free securities are as summarized in the following​ table:
 
Maturity
1 year
2 years
3 years
4 years
5 years
​Zero-Coupon Yields
7.00​%
7.60​%
7.90​%
8.30​%
8.70​%
 
What is the maturity of a​ default-free security with annual coupon payments and a yield to maturity of
7.00%​?
​Why?
What is the maturity of a​ default-free security with annual coupon payments and a yield to maturity of
7.00%​?
 
A.
One year
 
B.
Two years
 
C.
Three years
 
D.
Four years
 
E.
Five years
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