What is the fair market price of the bond what is the yield


You are considering investing in a 15% coupon rate bond with annual coupons, a three-year maturity and a face value of 1000. You observe the following rates for discount, or zero-coupon, bonds: Maturity Zero Coupon YTM 1 3.1% 2 5.2% 3 4.9% (a) What is the fair market price of the bond? (b) What is the yield to maturity of the bond? (c) What does the market expect the 1 year rate to be in 1 year from now? (d) What does the market expect the 1 year rate to be in 2 years from now? (e) What does the market expect the 2 year rate to be in 1 year from now?

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Financial Management: What is the fair market price of the bond what is the yield
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