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You are given that the one year annual effective spot rate is 5%. You are also given the following annual effective forward rates of interest:
You are given that the one year annual effective spot rate is 5%. You are also given the following annual effective forward rates of interest:
1-year forward, 6%; 2-year forward, 6.5%; 3-year forward, 6%.
Find the purchase price and yield to maturity of a 4-year bond with face amount 100 and annual coupons at rate 10%.
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