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Homework answers / question archive / The current zero-coupon yield curve for risk-free bonds is as follows: Maturity 1 2 3 4 5 YTM 4

The current zero-coupon yield curve for risk-free bonds is as follows: Maturity 1 2 3 4 5 YTM 4

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The current zero-coupon yield curve for risk-free bonds is as follows:

Maturity 1 2 3 4 5

YTM 4.96% 5.48% 5.71% 5.91% 6.09%

The price per $100 face value of a four year, zero-coupon, risk free bond is $__ (Round to the nearest cent)

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Computation of the price of the bond:-

FV = PV*(1+rate)^n

$100 = PV*(1+5.91%)^4

PV = $100 / 1.2582

= $79.48 or $79

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