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Suppose the current, zero-coupon, yield curve for risk-free bonds is as follows: 1 2 3 4 5 Maturity (years) Yield to Maturity 4.54% 5.03% 5.28%
Suppose the current, zero-coupon, yield curve for risk-free bonds is as follows: 1 2 3 4 5 Maturity (years) Yield to Maturity 4.54% 5.03% 5.28% 5.56% 5.69% a. What is the price per $100 face value of a 3-year, zero-coupon risk-free bond? b. What is the price per $100 face value of a 5-year, zero-coupon, risk-free bond? c. What is the risk-free interest rate for a 2-year maturity? Note: Assume annual compounding
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