The following table summarizes prices (expressed as a percentage of face value) of various default-free semi-annual bonds with coupon rates of 4% Maturity (years) 1 2 3 4 Price (per $100 face value) 94.52 89.68 85.40 81.65 Calculate the annual yield to maturity for each bond. What can you say about the yield curve for these bonds?
The following table summarizes prices (expressed as a percentage of face value) of various default-free semi-annual bonds with coupon rates of 4%
Maturity (years) | 1 | 2 | 3 | 4 |
Price (per $100 face value) | 94.52 | 89.68 | 85.40 | 81.65 |
- Calculate the annual yield to maturity for each bond.
- What can you say about the yield curve for these bonds?