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Question 3 Consider the following information in Table 2, on three default-risk free bonds with annual coupon payments and face value of $1,000. Table 2

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Question 3 Consider the following information in Table 2, on three default-risk free bonds with annual coupon payments and face value of $1,000. Table 2 Bond Coupon rate (%) 4 A Time to maturity (years) Yield to maturity (%) 1 5 2 6 3 8 6.5 o 8 (3 marks) (b) Determine the current term structure of spot interest rates and briefly comment on the shape of the term structure

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