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Wells Fargo issued a 3-year annual coupon bond with face value of $1000 and a coupon rate of 5%. Suppose the 1-year, 2-year, and 3-year
Wells Fargo issued a 3-year annual coupon bond with face value of $1000 and a coupon rate of 5%. Suppose the 1-year, 2-year, and 3-year spot rates are 2%, 3%, and 6% respectively. What is the current price of the bond; suppose this bond has zero default risk?
$977.75
$1,088.13
$1,000
$1,050
$860
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