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Question 6. Suppose annually compounded zero rates for all maturities are ra. An annuity pays n at years n = 1, 2, ...,N. 1. What

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Question 6. Suppose annually compounded zero rates for all maturities are ra. An annuity pays n at years n = 1, 2, ...,N. 1. What is the present value of the annuity? Hint: N d 1 dr (1+r)" n=1 N 1 n 1+r (1+r)" n=1 2. What is the present value of the infinite annuity as N + oo

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