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The Federal Government 2year coupon bond has a face value of $1,000 and pays annual coupons of $33. The next coupon is due in one

The Federal Government

2year

coupon bond has a face value of $1,000 and pays annual coupons of $33. The next coupon is due in one year. Currently, the one and

twoyear

spot rates on Federal Government zero coupon bonds are 4% and 4.5%. What is the correct price for the coupon bond at time zero (immediately)?

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