The yield to maturity for the three-year zero-coupon bond is closest to ________

The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of face value):

Maturity (years) 1 2 3 4 5
Price (per $100 face value) 94.52 89.68 85.40 81.65 78.35

A) 5.40%
B) 2.70%
C) 10.80%
D) 0.15%

Answer: A

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