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Suppose the current term structure of interest rates, assuming annual compounding, is as follows: s1 s2 s3 s4 s5 s6 7.0% 7.3% 7.7% 8.1% 8.4%
Suppose the current term structure of interest rates, assuming annual compounding, is as follows: s1 s2 s3 s4 s5 s6 7.0% 7.3% 7.7% 8.1% 8.4% 8.8% What is the discount rate d(0,4)? (Recall that interest rates are always quoted on an annual basis unless stated otherwise.)
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