The following is a list of prices for zero-coupon bonds with different maturities and par values of $1,000. $$\begin{array}{cc}\text{ Maturity }& \text{ Price }\\ \text{ (Years) }& \\ 1& \$943.40\\ 2& 881.68\\ 3& 808.88\\ 4& 742.05\end{array}$$ What is the yield to maturity on a 3-year zero-coupon bond?

A) 6.37%
B) 9.00%
C) 7.33%
D) 10.00%
E) None of the options are correct.

Yield to Maturity

The total return anticipated on a bond if the bond is held until it matures, incorporating both interest payments received and any gain or loss if the bond is bought at a discount or premium to its face value.

Zero-coupon Bond

A type of bond that does not pay interest during its life but is sold at a discount and matures at its face value.

Maturity

The date on which the principal amount of a loan, bond, or other financial instrument becomes due and payable.