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Consider price quotes and characteristics for two different bonds: At the same time, you observe the spot rates for the next three years: Demonstrate whether
Consider price quotes and characteristics for two different bonds: At the same time, you observe the spot rates for the next three years: Demonstrate whether the price for either of these bonds is consistent with the quoted spot rates. Under these conditions, recommend whether Bond A or Bond B appears to be the better purchase. Do not round intermediate calculations. Round your answers to the nearest cent. The non-arbitrage price of Bond A: \$ The non-arbitrage price of Bond B:$ appears to be the better purchase
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