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a) Show that the bond can be stripped as a series of zero-coupon bonds and portfolios of European options (to be determined) written on the

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a) Show that the bond can be stripped as a series of zero-coupon bonds and portfolios of European options (to be determined) written on the price of the ounce of gold. b) Knowing that G(0) = 27, the volatility of the ounce of gold price is 30%, and the yield curve is flat at 6.1%, compute the value of this bond (up to 2 decimals) using BS formula. Comment your result, ie. explain intuitively why the bond price is above or under par

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