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    Calculating YTM of a four year default bond

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    Use the following information to answer the question (s) below
    Maturity (years) 1 2 3 4 5
    Zero- coupon YTM 3.25% 3.50% 3.90% 4.25% 4.40%

    Consider a four year default free bond with an annual coupon rate of 4.5% and a face value of $100. The YTM on this bond is closest to:

    1. 3.85%
    2. 4.20%
    3. 4.40%
    4. 4.35%

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    https://brainmass.com/business/bond-valuation/calculating-ytm-four-year-default-bond-533813

    Solution Summary

    Solution depicts the steps to estimate the YTM of a four year default free bond.

    $2.19

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