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Today is 15 November 2021, Sandy just purchased a Treasury bond with a coupon rate of j 2 = 3.105% p.a. and a face value
Today is 15 November 2021, Sandy just purchased a Treasury bond with a coupon rate of j2 = 3.105% p.a. and a face value of $100 that matures at par. The purchase price was $97.93. The maturity date of this bond is 15 May 2023.
a) Use linear interpolation to calculate the yield rate. Give your answer in j2 form, rounded to 3 decimal places. Hint: 1.55% per half year and 2.35% per half year are the lower bound and the upper bound for the linear interpolation
a.
4.385%
b.
2.275%
c.
3.900%
d.
4.550%
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