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Suppose that the 1-year spot rate is 1%, the 2-year spot rate is 2% and the 3-year spot rate is 3%. What is the price

Suppose that the 1-year spot rate is 1%, the 2-year spot rate is 2% and the 3-year spot rate is 3%. What is the price of a $1,000 par value 3-year bond paying a 2.5% annual coupon payment?

$938.02

$1,044.11

$1,014.42

$986.80

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