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show work in excel. Question 3. (12 points) You are considering investing in an 18% coupon rate bond with annual coupons, a hree-year maturity and
show work in excel.
Question 3. (12 points) You are considering investing in an 18% coupon rate bond with annual coupons, a hree-year maturity and a face value of 1000 . You observe the following rates for discount, or zero-coupon, onds with face values of 100 (STRIPS): (a) What is the fair market price of the bond? (b) What is the yield to maturity of the bond? (c) What is the price of the one year STRIP? (d) What is the price of the two year STRIP? (e) What is the price of the three year STRIP? (f) What does the market expect the 1 year rate to be in 1 year from now? (g) What does the market expect the 1 year rate to be in 2 years from now? (h) What does the market expect the 2 year rate to be in 1 year from nowStep by Step Solution
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