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Suppose the one year spot rate and two year spot rate are both 3%. the bond price is $1000 a) calculate the price of a

Suppose the one year spot rate and two year spot rate are both 3%. the bond price is $1000

a) calculate the price of a two year ZCB?

b) calculate the price of a one year ZCB today?

c) What do I expect the price of a one year ZCB to be, one year from now?

Same 3 questions except now the one year spot rate is 3% and the 2 year spot rate is 4%.

Same 3 questions except now the one year spot rate is 3% and the 2 year spot rate is 2%

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