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Riding yield curve. Assume you have a one year horizon (funding plan for a year is in place) Yield curve on coupon par bonds (100

Riding yield curve. Assume you have a one year horizon (funding plan for a year is in place)

Yield curve on coupon par bonds (100 par, annual payments)

1 year : 10% 2 year: 12%

If you ride the yield curve for one year, what will be your holding period yield for

a. The one year maturity?

b. The two year maturity?

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