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Actuarial FM question Please show steps, final answer is 862.0219 . A 20-year 1000 par value bond pays 4% annual coupons. The bond is priced

Actuarial FM question

Please show steps, final answer is 862.0219

. A 20-year 1000 par value bond pays 4% annual coupons. The bond is priced to yield an annual effective rate of 5%. The continuous compounded risk free rate of interest is 4%. Find the delivery price of the bond for a three year forward contract (with delivery after the third coupon payment).

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