Use the table for the question(s) below.
Consider the following zero-coupon yields on default-free securities:
-The YTM of a 3-year default-free security with a face value of $1000 and an annual coupon rate of 6% is closest to:
A) 5.5%
B) 5.8%
C) 5.5% .
D) 5.2%

Question

Use the table for the question(s) below.
Consider the following zero-coupon yields on default-free securities: 
-The YTM of a 3-year default-free security with a face value of $1000 and an annual coupon rate of 6% is closest to:
A) 5.5% 
B) 5.8% 
C) 5.5% . 
D) 5.2%

Quizplus · Accepted Answer

D) P = 60 / 1.058 + 60 / 1.055² + 1060 / 1.052³ = 1021.07 PV = -1021.07 PMT = 60 FV = 1000 N = 3 Compute I = 5.223 or 5.2%

Use the Table for the Question(s) Below