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The one year spot interest rate is 2% and the two year spot rate is 3%. What is the price of a two-year bond with

The one year spot interest rate is 2% and the two year spot rate is 3%. What is the price of a two-year bond with face value 1,000 and coupon rate 3%? Assume that coupons are paid annually.

1000.87 b. 997.34 c. 1000.29 d.

1029.41

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