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Question 4. Two market standards for US dollar interest rates are semi-annual com- pounding (semi-bond, denoted rsb) and annual compounding with (annual-money, denoted ram). a)

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Question 4. Two market standards for US dollar interest rates are semi-annual com- pounding (semi-bond, denoted rsb) and annual compounding with (annual-money, denoted ram). a) Derive an expression for ram in terms of rsb. b) Calculate ram when rs = 0.5, 0.6, and 0.7. 1

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