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1) Zero Coupon Bond pricing (5 marks) The table below shows market prices for four groups of zero coupon bonds with four different terms: one, two, three and four years. The four groups of bonds all have a face value of $10,000. How would you describe the yield curve? (Hint: consider if the curve slopes upward or downward? What is the spread between short and long-term yields?) (5 marks) Term Price (years) 9700.8738 9330.5107 8880.9964 8220.7025

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