The above table shows the price per $100-face value bond of several risk-free, zero-coupon bonds. What is the yield to maturity of the two year, zero-coupon, risk-free bond shown?
Maturity (years) 1 2 3 4 5
Price $97.25 $94.53 $91.83 $89.23 $87.53
A) 1.43%
B) 5.71%
C) 0.05%
D) 2.85%
Answer: D
Business
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