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(30 Points) a. Suppose the market rate of interest is 6%, what price would you be willing to pay for a risk-free zero coupon bond

(30 Points)

a. Suppose the market rate of interest is 6%, what price would you be willing to pay for

a risk-free zero coupon bond maturing in exactly 10 year? Face value of the bond is $100.

b. How much would you expect to pay per month on a $20,000 auto loan if you pay the loan back for 48 month and pay 10% interest?

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