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Assume the zero-coupon yields on default-free securities are as summarized in the following table: begin{tabular}{|c|c|c|c|c|c|} hline Maturity & 1 year & 2 years & 3

image text in transcribed Assume the zero-coupon yields on default-free securities are as summarized in the following table: \begin{tabular}{|c|c|c|c|c|c|} \hline Maturity & 1 year & 2 years & 3 years & 4 years & 5 years \\ \hline Zero-Coupon YTM n & 6.3% & 6.7% & 7.0% & 7.2% & 7.3% \\ \hline \end{tabular} compounding. What is the price today of a two-year, default-free security with a face value of $1,000 and an annual coupon rate of 8% ? The price is $ (Do not round until the final answer. Then round to the nearest cent.) Does this bond trade at a discount, at par, or at a premium? Choose the correct answer below. A. This bond trades at par. B. This bond trades at a premium. C. This bond trades at a discount. D. Not enough information

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