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
Reference No:- TGS01156234

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