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Basic Question 9 of 13
Assume the spot rates r(1) = 9%, r(2) = 10% and r(3)= 11%. Consider a two-year annual coupon bond. The coupon rate is 6%. What is the MOST LIKELY yield to maturity y(2)?
B. 9.12%
C. 9.97%
A. 8.95%
B. 9.12%
C. 9.97%
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I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe relationships among spot rates, forward rates, yield to maturity, expected and realized returns on bonds, and the shape of the yield curve;
describe how zero-coupon rates (spot rates) may be obtained from the par curve by bootstrapping;
CFA® 2025 Level II Curriculum, Volume 4, Module 26.