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The available two-year par yield curve for the six-monthly periods curve is 5.00%, 5.50%, 6.00% and 6.60%, consecutively. You are considering the purchase of a
The available two-year par yield curve for the six-monthly periods curve is 5.00%, 5.50%, 6.00% and 6.60%, consecutively. You are considering the purchase of a 5% semi-annual coupon bond that matures in two years time. Construct the six-month zero-coupon rates for the two-year period and calculate the fair value of the 4% coupon bond.
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