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Question 5 A two-year bond with annual coupons of 100 and redemption value of 1000 is priced at 1,037.41. The current two-year spot rate is

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Question 5 A two-year bond with annual coupons of 100 and redemption value of 1000 is priced at 1,037.41. The current two-year spot rate is 8%. Determine the current one-year spot rate that is consistent with the pricing of the bond. (a) 3% (b) 4% (c) 5% (d) 6% fa70

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