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Maya Harris, a junior bond analyst for Persimmon Advisors, is researching investment alternatives for clients. Harris computed the following par and spot rates from annual-coupon
Maya Harris, a junior bond analyst for Persimmon Advisors, is researching investment alternatives for clients. Harris computed the following par and spot rates from annual-coupon sovereign government bonds: a. Compute the 2-, 3-, and 4-year spot rates (z2,z3, and z4). (3 points) b. Harris is considering a four-year, 5% annual coupon corporate bond. If the appropriate z-spread is 4%, what is the value of the corporate bond per 100 par? (2 points)
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