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solve in 50 mins i will give thumb up Problem 9. The current 1-year rate (f0,1) is 4%, the 1-year forward rate for lending from

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solve in 50 mins i will give thumb up

Problem 9. The current 1-year rate (f0,1) is 4%, the 1-year forward rate for lending from time =1 to time 2(f1,1) is 5%, and 1-year forward rate for lending from time =2 to time =3 (f2,1) is 6% 3 a) Value a 3-year annual-pay bond with a 5% coupon and a par value of $1,000 using forward rates b) Compute the corresponding spot rates

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