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3. a. Consider the following spot rates: S1=5%S2=6%S3=7%S4=8% Calculate four-years plain-vanilla interest rate swap rate. (5 Marks) 3. b. During a board meeting regarding the

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3. a. Consider the following spot rates: S1=5%S2=6%S3=7%S4=8% Calculate four-years plain-vanilla interest rate swap rate. (5 Marks) 3. b. During a board meeting regarding the valuation of equity, Steve made an argument that the value of equity of the company can be calculated by making it analogous to options. Provide an explanation for Steve's statement in detail

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