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Question 5. Consider the following prices of zero-coupon bonds with face value of $1,000: Maturity 1 year 2 years 3 years 4 years Price 968.52

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Question 5. Consider the following prices of zero-coupon bonds with face value of $1,000: Maturity 1 year 2 years 3 years 4 years Price 968.52 929.02 915.15 905.95 a) Compute the spot rates implied by these prices. b) Use the information in the above bond prices to find the price of a coupon bond with maturity 4 years from now, annual coupon rate 7%, and face value $1000

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