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Suppose the price of the 3-year zero coupon bond is $800 and the 6-year zero bond is $600 How could you lock the 3-year borrowing
Suppose the price of the 3-year zero coupon bond is $800 and the 6-year zero bond is $600
- How could you lock the 3-year borrowing rate starting at the end of year 3?
Transaction | Time=0 | Time=3 | Time=6 |
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- What is the implied forward rate on a 3- year bond which will start at the end of year 3
- According to the liquidity premium theory of the term structure. What is the expected rate on a 3-year bond at the end of year 3?
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