(SOLVED) The following table shows the prices of strips of Canada


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The following table shows the prices of strips of Canada bonds in November 2012. Each strip makes a single payment of $100 at maturity.
a. Calculate the annually compounded, yield to maturity (spot interest rate) for each bond.
b. Is the term structure upward- or downward-sloping?
Maturity Price ($)
June 2010……………….96.94
June 2012……………….91.04
June 2015……………….80.58
June 2019……………….65.43
June 2025……………….45.75

Answer

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