Question

The yield to maturity of a one year zero coupon bond is 4 % p. a....

The yield to maturity of a one year zero coupon bond is 4 % p. a. and the yield to maturity for a two year zero coupon bond is 5 % p. a. If the par value of a 10% coupon bond (coupons paid annually) is $1,000 and it matures in two years its price will be:"

"$1,093.89 "

"$1,078.92 "

"$1,068.23 "

"$1,055.12 "

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