What is the price per 100 face value of a 3-year


Suppose the current, zero-coupon, yield curve for risk-free bonds is as follows:

Maturity (years) 1 2 3 4 5

Yield to Maturity 4.81 % 5.18 % 5.50 % 5.77 % 5.90 %

a. What is the price per $100 face value of a 3-year, zero-coupon risk-free bond?

b. What is the price per $100 face value of a 4-year, zero-coupon, risk-free bond?

c. What is the risk-free interest rate for a 4-year maturity Note: Assume annual compounding.?

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Financial Management: What is the price per 100 face value of a 3-year
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