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The yield to maturity on 5 % annual coupon bonds maturing at 1000 Par is as follows: yr 1: 6a5 yr 2: 6.5% yr 3:

The yield to maturity on 5 % annual coupon bonds maturing at 1000 Par is as follows:

yr 1: 6a5

yr 2: 6.5%

yr 3: 7%

calculate the 1,2 and 3 year spot rates

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