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The discount rate in year 1 is 3.5%, in year 2 it is 4.0%, and in year 3 it is 4.5%. What is the appropriate
- The discount rate in year 1 is 3.5%, in year 2 it is 4.0%, and in year 3 it is 4.5%.
- What is the appropriate price of a 3-year Treasury bond with a coupon rate of 5% and a face value of $1000? (Assume that the bond makes annual coupon payments.)
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- What is the expected price of the same 3-year Treasury bond in year 2, immediately after the bond makes its coupon payment in year 2?
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Key Financial Market Concepts
Authors: Bob Steiner
2nd Edition
0273750127, 978-0273750123
