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Fece vele = 1000 Bond A coupon rete = 4% years to metony = 1 yield to moturiy = 5% Bond B coupon rete =

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Fece vele = 1000 Bond A coupon rete = 4% years to metony = 1 yield to moturiy = 5% Bond B coupon rete = 6.54 years to mcturiy = 2 Yield to motory = 6% Bond B: 8% Coupon rete = years to mctory = 3 yield to motorty = 8% Spot retes: I +r. = 1.05 tr = 1.06 tr3 = 1.08 Q) How to ose Bond A, B and c to replicate a 3 year Zero Coupon bond with face vale of $1000

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