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Assume that the current one-year spot rate is 6% and the forward rates for one year hence and two years hence are, respectively: f1,2= 9%
Assume that the current one-year spot rate is 6% and the forward rates for one year hence and two years hence are, respectively:
f1,2= 9%
f2,3=10%
What should be the market price of an 8% coupon bond, with a $1,000 face value, maturing three years from today> The first interest payment is due one year from today. Interest is payable annually.
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