Consider Treasure notes with 5% coupon and 4.5, 5 and 5.5 years to expire. If the forward
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Question:
Consider Treasure notes with 5% coupon and 4.5, 5 and 5.5 years to expire. If the forward rate is 5.5% from 4.5 to 5 years and 4.5% from 5 to 5.5 years, can you tell which 5s has the lowest price? Explain.
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