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Question 2 Consider a two-year government bond with a principle of $100,900. The bond pays an annual (end of year) coupon of $1,500. (a) Calculate

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Question 2 Consider a two-year government bond with a principle of $100,900. The bond pays an annual (end of year) coupon of $1,500. (a) Calculate the initial (present) value or price of the bond if market interest rates are 1.5%%? (PV = $100,go0) (b) Calculate the initial (present) value or price of the bond if market interest rates are 0.5%? (PV = $101,985-10) (c) Calculate the initial (present) value or price of the bond if market interest rates are 2.5%? ($98,07258)

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