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Homework answers / question archive / Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $95

Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $95

Finance

Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $95.11, while a 2-year zero sells at $79.52. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 11% per year. a. What is the yield to maturity of the 2-year zero?(Do not round intermediate calculations. Round your answers to 3 decimal places.) Answer is complete and correct. 2-year zero Yield to Maturity 12.140 % b. What is the yield to maturity of the 2-year coupon bond? (Do not round intermediate calculations. Round your answers to 3 decimal places.) Answer is complete but not entirely correct. Yield to Maturity 2-year coupon 12.140 X % bond

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