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Problem3 Suppose you observe the following prices of default-free zeroc bonds, each with a face value of $100 Maturity Zero Coupon Bond Price $95.24 $88.00

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Problem3 Suppose you observe the following prices of default-free zeroc bonds, each with a face value of $100 Maturity Zero Coupon Bond Price $95.24 $88.00 S79.38 1 year 2 year 3 year a) Compute the yield curve, i.e. find the spot (zero coupon) rates for 1 year, 2 years, and 3 yeans. b) What is the fair market price of a three-year annual coupon bond with a $1000 face value and 5% co upon

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