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1.At your favorite bond store, Bonds-R-Us, you see the following prices a.1 year $100 zero selling for $90.19 b.Three-year 10% coupon $1,000 par bond selling
1.At your favorite bond store, Bonds-R-Us, you see the following prices a.1 year $100 zero selling for $90.19 b.Three-year 10% coupon $1,000 par bond selling for $1,000 c.Two-year 10% coupon $1,000 par bond selling for $1,000 Assume that the expectations theory for the term structure of interest rates holds, no liquidity premium exists, and the bonds are equally risky. What is the implied one-year rate two years from now?
This needs to be answering showing the work in Excel. Thanks for the help.
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