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answer both please Part II. Numerical Essay Questions: You must provide the necessary steps that lead to the answer to receive credits. 1. Use this

answer both please
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Part II. Numerical Essay Questions: You must provide the necessary steps that lead to the answer to receive credits. 1. Use this list of Treasury bond prices as of February 15, 2001 to answer the following questions. Assume semi-annual compounding. Coupon Maturity Quote 6s 8/15/01 100 Os 2/15/02 95 8s 8/15/02 103 10s 8/15/02 ? (a) Derive the 6-month, 1-year and 1.5-year discount factors using the 6s, Os and 8s. (b) Determine the arbitrage-free price for the 10s based on the discount factors solved in (a)

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