Calculating four year default bond for ytm


Problem:

Use the following information to answer the question (s) below

Maturity (years) 1 2 3 4 5

Zero- coupon YTM 3.25% 3.50% 3.90% 4.25% 4.40%

Consider a four year default free bond with an annual coupon rate of 4.5% and a face value of $100. The YTM on this bond is closest to:

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Finance Basics: Calculating four year default bond for ytm
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