Calculate the bond yield to maturity

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a) How much would you like to pay 100 face value of a four-year, zero-coupon, risk-free bond? In other words, calculate the price. Please show all your works.

b) Suppose a five- year bond with a 7% coupon rate and semiannual compounding is trading for a price of $951.58. Expressed as an APR with semiannual compounding, calculate the bond's yield to maturity (YTM). Please show all your works.

Reference no: EM131492810

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