How does one calculate the below two-year par yield given the zero rate curve: Assume the following two-year zero rate curvezero rate curve, with continuous compounding: 2.0% @ 0.5 years, 2.5% @ 1.0 year, 3.0% at 1.5 years, and 3.5% at 2.0 years.
2.0% @ 0.5 year
2.5% @ 1.0 year
3.0% @ 1.5 years
3.5% @ 2.0 years
What is the two year PAR YIELDpar yield?
I know we can use the zero rate curve to derive a theoretical price of the bond but don't know how that can be used for calculating the par yield.