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You are given the following term structure: , , . These are effective annual rates of interest for zero coupon bonds of 1, 2 and
You are given the following term structure: , , . These are effective annual rates of interest for zero coupon bonds of 1, 2 and 3 years maturity, respectively. A newly issued 3-year bond with face amount 100 has annual coupon rate 10%, with coupons paid once per year starting one year from now. Find the price and effective annual yield to maturity of the bond.
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