Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / A five year zero coupon bond price is $95
A five year zero coupon bond price is $95. Find
a. 1%
b. 1.05%
c. 1.03%
d. 1.01%
Assuming face value to be $100
Yield to maturity = (Face value / price)^1/periods - 1
Yield to maturity = (100 / 95)^1/5 - 1
Yield to maturity = (1.05263)^1/5 - 1
Yield to maturity = 1.0103 - 1
Yield to maturity = 0.0103 or 1.03%
