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4 . 3 2 . The table below gives Treasury zero rates and cash flows on a Treasury bond. Zero rates are continuously compounded. (
The table below gives Treasury zero rates and cash flows on a Treasury bond. Zero rates are continuously compounded.
a What is the bond's theoretical price?
b What is the bond's yield assuming it sells for its theoretical price?
tableMaturity yearsZero rate,Coupon payment,Principal$$$$$
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