aturity (years). rice 1 $97.25 $94.53 $91.83 $89.23 $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 four-year, zero-coupon, risk-free bond shown? OA. 2.89% OB. 1.44% OC. 0.11% OD. 5.78%

aturity (years). rice 1 $97.25 $94.53 $91.83 $89.23 $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 four-year, zero-coupon, risk-free bond shown? OA. 2.89% OB. 1.44% OC. 0.11% OD. 5.78%

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

H5.

1
$97.25
Maturity (years).
5
Price
$94.53
$91.83
$89.23
$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 four-year, zero-coupon, risk-free bond shown?
OA. 2.89%
OB. 1.44%
OC. 0.11%
OD. 5.78%

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Question 4?
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
Maturity (years) Price 1 $97.25 $94 53 591 83 5 $87.53 $09 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 four-year, zero-coupon, risk free bond shown? OA. 011% OB 2.00% OC. 144% OD 578 %
Data table ↑ The current zero-coupon yield curve for risk-free bonds is as follows: What is the price per $100face value of a two-year, zero-coupon, risk-free bond? The price per $100 face value of the two-year, zero-coupon, risk-free bond is $ (Click on the following icon in order to copy its contents into a spreadsheet.) Maturity (years) YTM 1 4.98% 2 5.48% 3 5.78% Print Done 4 5 5.96% 6.09% (Round to the nearest cent.) - X
Problem Suppose the following zero-coupon bonds are trading at the prices shown below per $100 face value. ● ● Determine the corresponding yield to maturity for each bond. Maturity 1 year 2 years 3 years 4 years Price $96.62 $92.45 $87.63 $83.06
Maturity (years) Price 2.83% 5.79% The above table shows the price per $100-face value bond of several risk-free, zero-coupon bonds. What is the yield to maturity of the four-year, zero- coupon, risk-free bond shown? 2.85% 12.07% 1 $97.25 2.89% 3 2 $94.53 $91.83 5 4 $89.23 $87.53
There are two zero-coupon bonds below: Coupon Term to rate maturity 0% 1 year 10% 2 years Bond A B FV $100 $100 Price $95.24 $107.42 Consider a 2-year coupon bond C with FV = $100, coupon rate=25%, and price = $ 138. Is Bond C underpriced/overpriced relative to Bonds A and B? What is the potential arbitrage trading strategy? O a. Overpriced; Long 3/22 unit of A; Long 25/22 unit of B; Short 1 unit of C O b. Underpriced; Long 3/22 unit of A; Long 25/22 unit of B; Short 1 unit of C O c. Overpriced; Long 3 unit of A; Long 25 unit of B; Short 1 unit of C O d. Underpriced; Long 3 unit of A; Long 25 unit of B; Short 1 unit of C
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