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Q. 2 (Coupon bond, 30 pts). Consider an annual coupon bond with face value F coupon rate i0, annualized interest rate r (0, 1) and

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Q. 2 (Coupon bond, 30 pts). Consider an annual coupon bond with face value F coupon rate i0, annualized interest rate r (0, 1) and a maturity of T years. The value of the bond at time zero is 2F. a. (5) Calculate the numerical value of rifT 2, i 0.6. b. (5) Calculate the numerical value of r if T-3, i = 0.6. c. (5) Show that d. (5) Sketch the plots of the left and right hand sides of (1) as functions of re

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