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Given the following Zero Rates (continuously compounded] calculate the theoretical price of the bond Time {yrs} Zero Ratesl 0.5 5.00 1.0 5.30 1.5 5.40 2.0

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Given the following Zero Rates (continuously compounded] calculate the theoretical price of the bond Time {yrs} Zero Ratesl 0.5 5.00 1.0 5.30 1.5 5.40 2.0 6.30 Bond has Face iy'alue {Par iuaIue) of $100. Pays coupons of 6% per annum payable semi-annually. Duration {time to maturity} of bond is 2 years. Calculate the Bond Yield on the above bond given that the market price is 93.39. Write but do not solve the equation For an exactly similar bond to that in (i), except for coupon, write an equation to calculate c where this new bond pays a coupon of c per annum payable semi-annually. C is such that you are calculating the PAR YIELD on the bond. Do not solve the equation

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