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Spot rates of interest for zero-coupon Government of Canada bonds are observed for different terms to maturity as follows: Term to maturity Rate (r i
Spot rates of interest for zero-coupon Government of Canada bonds are observed for different terms to maturity as follows: Term to maturity Rate (r i ) 1 year from today 5% 2 years from today 6% 3 years from today 7% 4 years from today 8% 5 years from today 9% What is the price of a risk-free bond with 100 dollar annual coupons, a face value of $1000, and maturity in 4 years. a) 1070 b) 1071 c) 1072 d) 1073 e) 107
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