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The following coupon bonds mature in 4 years. (i) 10% bond priced at $1102 (ii) 4% bond priced at $1005 Face value of the bonds

The following coupon bonds mature in 4 years.

(i) 10% bond priced at $1102

(ii) 4% bond priced at $1005

Face value of the bonds is $1000. (a) Compute the price of a security that pays $1 after 4 years. (b) Compute the annual interest rate of a zero coupon 4 years risk-free bon

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