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The following is a list of prices for zero-coupon bonds of various maturities. Each bond has a face value of 1,000 . 1. Calculate the
The following is a list of prices for zero-coupon bonds of various maturities. Each bond has a face value of 1,000 . 1. Calculate the yield-to-maturity for a bond with a maturity of (a) one year (b) two years 2. Calculate the forward rate for (a) the second year (b) the third year 3. Assume that the expectations hypothesis is valid, compute the expected price of the 4 year bond at the end of (a) the first year (b) the second year
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