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XYZ Corporation trades in two bonds, Bond A is a two-year bond maturing for $1000 with 10% annual coupons and Bond B is a two-year

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XYZ Corporation trades in two bonds, Bond A is a two-year bond maturing for $1000 with 10% annual coupons and Bond B is a two-year bond maturing for $1000 with 5% annual coupons. The current term structure is defined by S_t = 0.05 + 0.02t for t = 0,1,2 a Find the price of Bond A. b) Find the yield to maturity of Bond A. c) Find the price of Bond B. d) Find the yield to maturity of Bond B. e) Find the at-par-yield rate for the two-year bond using the current term structure

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