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b) Value a 3-period option-free bond with the following characteristics: 1. The bond matures in 3 periods 2. The bond has no default risk
b) Value a 3-period option-free bond with the following characteristics: 1. The bond matures in 3 periods 2. The bond has no default risk 3. The bond pays an 8% coupon each period 4. The bond pays $1,000 principal at maturity 5. The probability of an up and down movement is the same (50%).
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