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timeline with how ever many years is sufficient this is all the info known for the question(s) 9. Why would it be incorrect to use
timeline with how ever many years is sufficient
this is all the info known for the question(s)
9. Why would it be incorrect to use the yield to maturity on a 10 year discount bond as the yield to maturity on a 10 year coupon bond. (5 points) 10. The current market price of a one year discount bond with a face value of $100 is $ 89.28. Also, the current market price of a two year 25% coupon bond with a face value of $2000 is $2101.44. (12 points) a) Draw the timeline associated with each bond. b) Determine the spot rates between year 0 and year 1 and between year 1 and year 20. c) Use from part b) to determine the price of a two year discount bond with a face value of $4600. a) Draw the timeline associated with each bond. b) Determine the spot rates between year 0 and year 1 (r.) and between year 1 and year 2 (2). c) Use r, from part b) to determine the price of a two year discount bond with a face value of $4600Step by Step Solution
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