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(b) (8 points) This question is independent of the previous part. As- sume you are given the following bonds: Bond A a 2-year annual annuity

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(b) (8 points) This question is independent of the previous part. As- sume you are given the following bonds: Bond A a 2-year annual annuity that pays $500 each year and costs $900 Bond B a 2-year zero coupon bond with a face value $1000 that costs $850 Assuming no arbitrage what is the price of a one year zero coupon bond with a face of $1000

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