2.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 Price (per $1000 face value) 94.5 96.6 88.6 84.5...

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 $1000 face value) 94.5 96.6 88.6 84.5 77.7

a. Compute the yield to maturity for each bond.

b. Plot the zero-coupon yield curve (for the first five years).

c. Is the yield curve upward sloping, downward sloping, or flat?

Extracted text: 2.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 Price (per $1000 face value) 94.5 96.6 88.6 84.5 77.7 a. Compute the yield to maturity for each bond. b. Plot the zero-coupon yield curve (for the first five years). c. Is the yield curve upward sloping, downward sloping, or flat?