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Consider three zero-coupon bonds, Bond A is a one-year bond, bond B is a two-year bond, and Bond C is a three-year bond. They all
Consider three zero-coupon bonds, Bond A is a one-year bond, bond B is a two-year bond, and Bond C is a three-year bond. They all have face values of $1000. The market prices for Bond A, B, and C are $925.93, $826.45, and $ 749.51. Solve for one-, two-, and three-year spot rates using the prices of these bonds.
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