1.
=Price of 3 year/Price of 5 year
=839.92/695.66
=1.207371417
2.
Time 0
Cash Flow -839.92+695.66*1.207371417=0
Time 3
Cash Flow 1000
Time 5
Cash Flow -1.207371417*1000=-1207.371417
3.
=(1207.371417/1000)-1=20.74%
4.
=1000/695.66*1/(1000/839.92)-1=20.74%
Problem 15-19 The prices of zero-coupon bonds with various maturities are given in the following table....
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