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Given a one-year zero-coupon bond trading at 100 and promising to pay 106 at maturity, and a two-year 6% coupon bond with face value of

Given a one-year zero-coupon bond trading at 100 and promising to pay 106 at maturity, and a two-year 6% coupon bond with face value of 100, annual payments, and trading at 96.54: a. Determine the one-year and two-year zero-coupon rates. b. What is the theoretical price of a comparable two-year 8% annual coupon bond (F = 100)?

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