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Given the following rates: 1 Year STRIP 6% 2 Year STRIP 5% 3 Year STRIP 4%, 4 Year STRIP 4% All Bonds have a par

Given the following rates: 1 Year STRIP 6% 2 Year STRIP 5% 3 Year STRIP 4%, 4 Year STRIP 4%

All Bonds have a par value of $1000.

A) Find the expected 1-year rate in 2 years from now (i.e. March 2021)

B) Find the 2 year rate in 1 year from now (i.e. March 2020)

C) What is the price of the 3-year bond today?

D) What will the price of the 3-year bond be in 2 years?

Please show work.

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