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The yield curve for default - free zero - coupon bonds is currently as follows: Maturity YTM 1 1 0 % 2 1 1 %
The yield curve for defaultfree zerocoupon bonds is currently as follows:
Maturity YTM
a Assume that the expectation hypothesis is correct. What are the implied year rates in years and
Year : year :
Year : Year :
The implied rates are
b Assume that you buy a y bond in the beginning of year Its par value is $ What is the bonds expected YTM and price?
I just need help with part B of the above question. Thank you!
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