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Problem 2. The following is a list of prices for zero-coupon bonds with different maturities and par value of $1,000. What is the price of
Problem 2. The following is a list of prices for zero-coupon bonds with different maturities and par value of $1,000. What is the price of a 4-year maturity bond with a 10% coupon rate paid annually and par value of $1,000?
\begin{tabular}{|l|l|} \hline Maturity (Years) & Price \\ \hline 1 & $925.16 \\ \hline 2 & $862.57 \\ \hline 3 & $788.66 \\ \hline 4 & $711.00 \\ \hline \end{tabular}Step by Step Solution
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