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The price of a 1-year zero-coupon bond with face value $100 is $98. The price of a 2-year coupon bond with face value $100 and
The price of a 1-year zero-coupon bond with face value $100 is $98. The price of a 2-year coupon bond with face value $100 and a 2% coupon rate, paid annually, is $98.86. What is the arbitrage-free price of a 2-year coupon bond with face value $100 and a 4% coupon rate, paid annually?
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