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A 10-year, 6% coupon bond (paid annually) currently sells for $90. A 10-year 4% coupon bond (paid annually) sells for $80. Compute: (a) 10-year zero
A 10-year, 6% coupon bond (paid annually) currently sells for $90. A 10-year 4% coupon bond (paid annually) sells for $80. Compute:
(a) 10-year zero interest rate
(b) The no-arbitrage price of a 10-year 8% coupon bond. Assume all three bonds are equally risky.
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