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4. Consider a 2-year euro-denominated bond that has a current market price of 950, a face value of 1,000, and an annual coupon rate of

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4. Consider a 2-year euro-denominated bond that has a current market price of 950, a face value of 1,000, and an annual coupon rate of 6%. Suppose the one-year euro-denominated spot interest rate is 5.5%. What is the two-year euro-denominated spot interest rate? (8 marks)

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