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Consider the following zero-coupon yields on default-free securities (10 MARKS): Maturity (years) 1 2 3 4 5 Zero-Coupon YTM 5.80% 5.50% 5.20% 5.00% 4.80% a.
Consider the following zero-coupon yields on default-free securities (10 MARKS): Maturity (years) 1 2 3 4 5 Zero-Coupon YTM 5.80% 5.50% 5.20% 5.00% 4.80% a. What is the price today of a 3-year default-free security with a face value of $1,000 and an annual coupon rate of 6%? Show all your work. b. How will a 3-year default-free security with
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