1. You own a -par zero-coupon bond that has five years of remaining maturity. You plan on...

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1. You own a -par zero-coupon bond that has five years of remaining maturity. You plan on selling the bond in one year and believe that the interest rate next year will have the following probability distribution:

a. What is your expected price when you sell the bond? b. What is the standard deviation of the bond price?

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Financial Markets And Institutions

ISBN: 9780134519265

9th Edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

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