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What is the NPV? Suppose that the term structure of risk-free spot interest rates (expressed as EARs) is: 1 2 3 4 5 Maturity (years)

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What is the NPV?

Suppose that the term structure of risk-free spot interest rates (expressed as EARs) is: 1 2 3 4 5 Maturity (years) Zero-Coupon YTM (EAR) 1.80% 2.50% 3.20% 4.00% 4.30% You have been offered a unique risk-free investment opportunity: If you invest $28,000 today, you will receive $2,000 one year from now, $4,000 two years from now, nothing for year 3 and year 4, and $25,000 five years from now

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