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Consider a bond with the following features: Exactly 2 years to maturity 7% coupon, paid annually $100 par value You observe the following interest rates

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Consider a bond with the following features: Exactly 2 years to maturity 7% coupon, paid annually $100 par value You observe the following interest rates in the economy: Time Period "Oyly" "Oy2y" "lyly Rate 4.00% 5.025% 6.061% Although the "lly" rate above is the market's expectation for what the 1 year rate will be 1 year from now, you expect that it is equally likely that the actual rate is either 25% higher or 25% lower than the expectation. Specifically, you believe that the one year rate will either be 7.273% or 4.875%. 18.(4 pts. What is the price of the bond if it is non-callable? 19. (4 pts.) Using your answer from #18 above, what is the bond's yield to maturity

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