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Assume that the (annual) spot rates for maturities strictly shorter than 4 years, given on a semi-annual basis are given in the table below:

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Assume that the (annual) spot rates for maturities strictly shorter than 4 years, given on a semi-annual basis are given in the table below: Maturity (years) 0.5 Spot rate 5.1% 1 5.4% 1.5 5.2% 2 5.6% 2.5 6.1% 6.2% 6.5% 3 3.5 What is the 4-year spot rate, knowing that the Government bonds expiring 4 years from now have a coupon rate of 8.0% and are quoted at 95 per 100 nominal? [30%]

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