The market price of a 4-year 6 coupon non-treasury issue is, Financial Management

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The market price of a 4-year 6 coupon non-treasury issue is

The market price of a 4-year 6% coupon non-Treasury issue is $102.4083.

a. Calculate the current yield

b. Calculate the yield to maturity

c. Compute the zero-volatility spread over the Treasury spot rate.

Assume the following Treasury spot rate curve for this problem:

Period Years to maturity Spot Rate

1 .5 2.00%

2 1.0 2.40%

3 1.5 2.80%

4 2.0 3.40%

5 2.5 4.00%

6 3.0 4.20%

7 3.5 4.40%

8 4.0 4.80%

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Financial Management: The market price of a 4-year 6 coupon non-treasury issue is

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Financial Management: The market price of a 4-year 6 coupon non-treasury issue is

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