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At your favorite bond store, Bonds-R-Us, you see the following prices: . . 1-year $100 zero selling for $90.19 3-year 10% coupon $1000 par bond
At your favorite bond store, Bonds-R-Us, you see the following prices: . . 1-year $100 zero selling for $90.19 3-year 10% coupon $1000 par bond selling for $950 2-year 10% coupon $1000 par bond selling for $1000 . Assume that the pure expectations theory for the term structure of interest rates holds, no liquidity or maturity premium exists, and the bonds are equally risky. What is 3-year rate today? O 9.95% O 9.97% 0 10.877% O 12.28% At your favorite bond store, Bonds-R-Us, you see the following prices: . . 1-year $100 zero selling for $90.19 3-year 10% coupon $1000 par bond selling for $950 2-year 10% coupon $1000 par bond selling for $1000 . Assume that the pure expectations theory for the term structure of interest rates holds, no liquidity or maturity premium exists, and the bonds are equally risky. What is 3-year rate today? O 9.95% O 9.97% 0 10.877% O 12.28%
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