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Treasury notes were issued with 2 year maturaties and a par value of 1000. They annually paid out a coupon rate rate of 3%. The

Treasury notes were issued with 2 year maturaties and a par value of 1000. They annually paid out a coupon rate rate of 3%. The forward rates for 1 year and 2 year are 2 and 4% respectively. Assuming liquidity preference and a constant 1.5% premium for each year what is the price today and expected price next year?

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