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Jim just purchased a 10-year 3.10% p.a. Treasury bond with a face value of $100. The bond will be redeemable at par (i.e., redeemed at
Jim just purchased a 10-year 3.10% p.a. Treasury bond with a face value of $100. The bond will be redeemable at par (i.e., redeemed at face value). Yield rates over the next 10 years are expected to be j2=2.85% from year 1 to year 3, j2=3.92% from year 4 to year 7 and j2=4.75% from year 8 to year 10.
How much should Jim pay at purchase?
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