A zero-coupon bond with face value 1000 and maturity of


A zero-coupon bond with face value $1,000 and maturity of five years sells for $738.22.

a. What is its yield to maturity? (Round your answer to 2 decimal places.)

Yield to maturity             %

b. What will the yield to maturity be if the price falls to $722? (Round your answer to 2 decimal places.)

Yield to maturity             %

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Financial Management: A zero-coupon bond with face value 1000 and maturity of
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