Implied ytm on a hypothetical


Problem:

The annual coupon rate on a 1-year treasury bond is 5.5%. The coupon on a 2-year treasury bond is 5.8%.

Required:

Question: What is the implied YTM on a hypothetical 2-year zero coupon treasury bond?

Note: Please provide step by step solution.

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Finance Basics: Implied ytm on a hypothetical
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